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Think Twice Before You Accept a Partial Payment

If you are involved in a contractual dispute, and the other party offers you a payment to resolve the dispute, you may want to consult an attorney before accepting the funds.

The Fourth District Court of Appeal recently addressed this issue in the case of Construction Consulting, Inc. v. District Board of Trustees of Broward. This case arose from a construction contract between two parties, CCI and College. The College offered a final payment to cover the outstanding invoices, which was only a partial payment of the amounts due and owing. CCI accepted and deposited the money. The Fourth District Court of Appeal held that CCI’s acceptance of the partial payment, under the facts of the case, barred CCI’s subsequent claims against the College for the rest of the money still due and owing.

In this case, the payment was sent to CCI with a report stating it was a “summary of the final agreement between Construction Consulting Contractors (CCI) and Broward College to reconcile final payment due to CCI for outstanding invoices.” The report enclosing the payment also included a “Final Payment” chart corresponding to the amount of the checks. However, the checks contained no “payment in full” language on them. CCI deposited the checks and after that demanded the additional funds and filed suit.

The trial court granted summary judgment because it concluded that CCI waived and released all claims by depositing the checks under the doctrine of accord and satisfaction. The Fourth District Court of Appeal agreed stating that “when a claim in controversy is open and unliquidated and the party to whom it is due accepts payment in full it will operate as an accord and satisfaction even though the party to whom paid declares that he only takes it in part satisfaction.” The Fourth District explained that the language used by the parties in a transaction is crucial to creating an accord or satisfaction. In Construction Consulting, the Fourth District found that CCI was put on clear notice that its acceptance of the funds was intended to fully resolve the parties’ dispute.

Rosenthal Law Group is here to assist you with all your contractual disputes and can provide legal assistance under what circumstances you should deposit or return those funds to avoid creating an accord and satisfaction to your claim.