Full and final settlement

SueC_2

I have long since believed (possibly incorrectly???) that if someone offers you a payment 'in full and final settlement', if you choose to accept that payment then there is no future claim against them. On the other hand, if you are not happy to accept the offer, the payment can be rejected and you can pursue a higher settlement.

All very well and good when there is cash or a cheque you can return. But how does it work in this day and age of electronic banking? If someone deposits x amount into your bank account, and writes to you saying it is in full and final settlement, how do you reject the offer when you have unknowingly accepted the money?

Mistral001

This is an interesting one. With cheques the usual wording is "by banking this cheque you accept etc.....". But money going straight into your bank account?

I suppose it depends on the wording of the letter or email the company sends you regarding the settlement. Could be a bit tricky whatever the case in the event that you spend the money before telling the company that you reject it.

If it is not jsut a hypothetical question that you want the answer to, I suppose it is one for your bank to answer

paddyrg

You mention 'full and final settlement', so I presume this has come up in a communication somewhere. And it would follow that there would also be a discussion on that communication of the figure involved.

If they 'forced' the money on you by making a direct transfer they are clearly trying (slightly cheekily) to force an end to the issue. If you disagree with the amount you could thank them for their interim payment of good faith on account, however you reject the finality of the figure and will still be pursuing the original claimed amount. It'll come down a bit to how much of the settlement you want to waste with a willy-waving contest and how much energy you've got to fight with.

If the difference between their figure and yours is small, just swallow it and move on - they know they can waste your time to the point where it's uneconomical, and similarly you can theirs (however their lawyer might be on payroll, so effectively free). The world isn't black and white, it's a mess of filthy compromises and there comes a time to recognise diminishing returns on your effort!

SueC_2

Luckily at this stage it was purely a hypothetical question, although it's something I can quite well see becoming a reality at some point.

What made me think of it was that I had reached the point of issuing court proceedings against a customer who was not paying, but was not providing any explanation for not doing so. Papers had been served for the original amount, plus interest and costs. Lo and behold, a couple of weeks later they paid the basic amount direct into our bank account, but not the amount of the interest or costs. To be honest, I was just delighted to receive anything - I had fully expected them to go to the wall taking our money with them, and so have neither the time nor inclination to pursue them further for the additional amounts.

But it did make me think about the potential for 'forcing' full and final settlement onto someone!

paddyrg

Frankly in that position I would probably write off the costs and interest, and tell friends you know in your sector about xyz company were poor at paying. You're into diminishing returns trying to chase those smaller amounts compared with the principal

SueC_2

SueC wrote: »

, and so have neither the time nor inclination to pursue them further for the additional amounts.

paddyrg wrote: »

Frankly in that position I would probably write off the costs and interest, and tell friends you know in your sector about xyz company were poor at paying. You're into diminishing returns trying to chase those smaller amounts compared with the principal

Great minds think alike.

Wywth

SueC wrote: »

I have long since believed (possibly incorrectly???) that if someone offers you a payment 'in full and final settlement', if you choose to accept that payment then there is no future claim against them. On the other hand, if you are not happy to accept the offer, the payment can be rejected and you can pursue a higher settlement.

All very well and good when there is cash or a cheque you can return. But how does it work in this day and age of electronic banking? If someone deposits x amount into your bank account, and writes to you saying it is in full and final settlement, how do you reject the offer when you have unknowingly accepted the money?

It's up to the debtor to prove they have a full and final agreement in place as they need to rely upon it later.

So ay you claim a debtor owes you £200 and they deposit £50 in your account, then sue them for £150
By returning the £50, you have not mitigated your original loss - something a court will always consider unfavourably when deciding if it will award you costs.

Slinky

I've had that happen to me where people have sent post dated cheques (dated prior to the court papers being sent) trying it on. I've written back, thanked them for their payment and pointed out that the court fees are still due. I kept the envelope the cheque was received in showing the date they were posted.

I spoke to the court at Northampton (if this is something you've done through moneyclaim). You are entitled to pursue the fees and if they don't pay, then you can get judgement against them for the fees, so they'll still end up with a CCJ.

I've got payment from 3 customers who tried this trick by going for judgement for the fees.

Savvy_Sue

I believe you can also present post-dated cheques whenever you receive them. AFAIK the bank will pass them whenever you pay them in. The level of checking is minimal, IMO.

(Examples: I've known of several instances where cheques were NOT signed by authorised signatories. I've also had the bank miscalculate the total of cheques paid in so that my figures disagree with them when I reconcile the bank statements.)

martindow

Savvy_Sue wrote: »

I believe you can also present post-dated cheques whenever you receive them. AFAIK the bank will pass them whenever you pay them in. The level of checking is minimal, IMO.

A few years ago I was given an unsigned cheque from someone who had been stringing me along with a series of excuses to avoid paying. I only realised he had not signed it as I was paying the cheque over the counter at the bank. The cashier said don't worry it will probably go through - which it did. What was most amazing was that he had funds to cover it!