This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If the offer which is claimed to be the basis of an accord is made by sending a check and the like, which is marked "in full," and the acceptance which is relied upon consists in accepting and cashing such check, a number of questions have been presented, on some of which there have been inconsistent decisions, due largely to ignoring the different sets of circumstances under which a check of this sort may be sent.
Such a check may be sent when no dispute between the parties of any sort has arisen when both parties assume that the account is true and correct. In such a case the fact that such check purports to be in full or for balance, does not amount to an offer of an accord, since the party to whom it is sent would not understand that there was any question of accord and satisfaction. In such cases the words "in full," or "for balance," and the like, would naturally be regarded by the party to whom the check was sent as the recital of a fact, rather than the offer of a contract. In cases of this sort, the receipt and use of the check is not regarded as an acceptance, since no offer has been communicated to the party to whom the check was sent.1
6Laughead v. H. C. Frick Coke Co., 209 Pa. St. 368, 103 Am. St. Rep. 1014, 58 Atl. 685.
7 Lilly v. Verser, - Ark. - , 203 S. W. 31.
8 Heath v. Potlatch Lumber Co., 18 Ida. 42, 27 L. R. A. (N.S.) 707, 108 Pac. 343; Lantry Contracting Co. v. Atchison, T. & 8. P. Ry. Co., 102 Kan. 799, 172 Pac. 527.
9 Heath v. Potlatch Lumber Co., 18
Ida. 42, 27 L. R. A. (N.S.) 707. 108 Pac. 343.
10 Lantry Contracting Co. v. Atchison, Topeka fc Santa Fe Ry. Co., 102 Kan. 709. 172 Pac. 527
11 Bennett v. Federal Coal & Coke Co., 70 W. Va. 456, 40 L. R. A. (N.S.) 588, 74 S. E. 418.
12 Bennett v. Federal Coal & Coke Co., 70 W. Va. 456, 40 L. R. A. (N.S.) 5SS. 74 S. E. 418.
13 See | 602.
On the other hand, the check may be sent after a dispute. has arisen between the parties. In such a case, leaving for discussion elsewhere the sufficiency of the consideration,2 the act of the debtor in sending a check which is marked "in full" and the like, should ordinarily be regarded by the creditor as an offer of an accord.
1 Harrison v. Henderson, 67 Kan. 104, 100 Am. St. Rep. 386, 62 L. R. A. 760, 72 Pac. 875; Canadian Fish Co. v. Mc-Shane, 80 Neb. 561, 14 L. R. A. (N.S.) 443, 114 N. W. 594.
See also, Heath v. Potlatch Lumber Co., 18 Ida. 42, 27 L. R. A. (N.S.) 707, 108 Pac. 343.
"To make the receipt of a part of the debt a discharge of the whole, there must be a new consideration, or a voluntary compromise of a disputable or disputed demand, by which each party yields something, or an accord and satisfaction by which a new contract is substituted. In this case there was no new consideration, and the contention of the defendant must be sustained, if at all, upon the theory that it was the compromise of a disputed claim. It is to be observed that there had been no actual dispute between the parties up to the time of the sending of defendant's letter above quoted. Assuming that the defendant was sincere in his contention (and we must so assume to make the claim a disputable one) and that he was actually mistaken in such claim (and this was found by the district judge upon sufficient evidence, as we have seen), we must conclude that he did not know of any dispute between the plaintiff and himself, but that he inclosed the check for $54.47 in the letter of June 5th, not as a compromise or settlement, but as full payment of an undisputed claim. The letter does not reveal any knowledge on the part of the defendant that the plaintiff was claiming the transaction to have been a Bale. We have, therefore, presented the question whether, where a debtor remits by mail a sum less than the amount due, but which he in good faith believes to be all that is due or claimed by the creditor, the fact that he marks the check on the margin, 'In full to date.' or in the account which he renders describes it as 'check to balance in full,' such payment is made in settlement of a disputed claim. We think the question must be answered in the negative. No intention to offer this payment as a compromise is apparent from the letter and its accompanying inclosure, and the plaintiff was not bound to so consider it. He was justified in treating it as the act of an honest debtor remitting less than was due under a mistake as to the nature of the contract." Canadian Fish Co. v. McShane, 80 Neb. 551, 14 L. R. A. (N.S.) 443. 114 N. W. 694. 2 See Sec. 2506 et seq.
If he accepts the check and makes use of it, the question is then presented whether such act is an acceptance or whether his declaration made to the creditor, that he does not accept the check in full can operate as a rejection of the offer, leaving his act in cashing the check a wrongful act. This is a special phase of the general question whether an offer which is to be accepted by an act can be rejected if the person to whom the offer is made declares that he rejects it, but, nevertheless, takes advantage of such offer by doing an act which would be. a wrong if it were not for such offer.3 In cases of this sort, it is held by the great weight of authority that the act of the party to whom the check is sent in accepting such check and in making use thereof, operates as an acceptance of the offer,4 even though the party to whom the check is sent notifies the party who sent it that he does not accept such check as full payment of his claim.5 The fact that the party who sent the check does not reply to a notice that such check is not accepted in full, does not operate as an assent to such modification of such offer in sending it.6 The fact that the party to whom the check is sent has it certified, operates as an acceptance of the check and of the offer of accord.7
3See Sec. 188 et seq.
4United States. Chicago, M. A, St. P. R. Co. v. Clark, 178 U. S. 353, 44 L. ed. 1090.