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Meaning of "Final Payment" on Memo Line

I received a check that has "final payment" written on the memo line, but the customer still owes money on his account. If I deposit the check, does that mean that I am completing the contract and will not be able to collect the remaining balance after doing so?

There are arguments on both sides of the question about whether something written on the memo line of a check can affect the rights of the parties to the check. Often, the question depends on whether there is already a dispute between the parties about the amount due. The safest thing to do is to return the check with a note indicating that you won't accept it, and ask for the payment due you (state the correct amount) by bank check or money order, without any "full payment" notation.

Published on 1/31/08