If I pay an individual for handy man jobs by check and on the final check post “Paid In Full”, is this final payment when cashed?

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If I pay an individual for handy man jobs by check and on the final check post “Paid In Full”, is this final payment when cashed?

I paid an individual for construction work and he did not finish the job. Even though he verbally agreed to do the job for free if he did not finish, I still paid him for what he completed and now he is asking for more money. He cashed my “Paid in Full” final check and is not asking for more money. I thought PIF meant that was the final payment and you could not come back and ask for more money. Am I wrong?

Asked on August 19, 2011 Alabama

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Unfortunately, such a marking on the memo line of a check is no legally binding effect. By cashing it, your payee (the contractor) gave up none of his legal rights to collect the full sum owed (or allegedly owed).  The reason is that if someone owes money, they may not arbitrarlily change the amount owed or terms of payment by merely making a check notation of this kind.  There is a common misconception that the memo line on a check has legal dorce - it does not.  This line is strictly for informational purposes only; it helps to identify the reason that a check was written. It does not bind the recipient.  Think about it, if it was that easy to alter the terms of a payment, everyone would do it. 

Bottom line, if you can't come to terms with your contractor, a court may have to decide what (if anything) is still owed.  


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