Simone Rodrigues - EngenhariaSimone Rodrigues - Engenharia
Simone Rodrigues - EngenhariaSimone Rodrigues - Engenharia
Simone Rodrigues - EngenhariaSimone Rodrigues - Engenharia

Agreement or Accord Cross

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A word of warning: the UCC is a “model” code for regulating trade. Since states are free to adopt the UCC with certain variations, local legislation should always be consulted. In addition, at least one court has ruled that the contract in a situation of agreement and satisfaction is distinct and different from the original contract that governed the transaction itself (remember that agreement and satisfaction are essentially a contract that modifies the terms of the original contract). Therefore, despite the wording of the original treaty that the law of a particular State applies, the State in which the cheque for full satisfaction was cashed will prevail. For example, your original purchase agreement stated that Virginia law was in control. After your customer disputes the amount due to invoice confusion with you, you agree to accept a smaller amount. Your customer will send a check with the inscription “PAYMENT IN FULL PAYMENT OF ALL AMOUNTS” to your home office in New York according to your instructions. Once your business has cashed the debtor`s full satisfaction check at your home office in New York, New York laws will be enforced in terms of compliance and satisfaction. Once the customer`s cheque has been cashed, your original contract has been renegotiated. Acceptance of the customer`s offer took place in New York, where the check was cashed.

Knowing this wrinkle can help you maintain the “house edge.” The cheque must contain a clear and visible statement that the cheque will be offered for full debt satisfaction before an agreement and satisfaction can be made. The statement must be visible so that a reasonable person noticed it or should have noticed it. The notice must indicate that the party offering the cheque is doing so as an offer to settle outstanding claims between the parties. This requirement is in line with the general principle of contract law, which requires a “meeting of minds”. Of course, if a creditor has not received a notification of offer, the offer cannot be accepted. In other words, no one can accept anything unless they know about it first. It is not enough to simply place the language of full satisfaction in the last lines of the accompanying proof of payment. the language must be perceptible. Under traditional customary law, after receiving a cheque less than the amount due, the creditor had two options and included a clear and visible statement that the cheque was offered to fulfill the entire obligation: (1) the creditor could either return or destroy the cheque and then demand or continue the full amount, or (2) the creditor could accept the cheque for the lower amount. However, the creditor may not accept the cheque in protest or remove the “Full satisfaction” note on the cheque.

If the creditor chose to cash the cheque, the debtor`s offer was deemed to have been accepted and the principle of compliance and satisfaction prevented the creditor from claiming additional amounts under the previous agreement. Under the UCC, a claim is not settled if an enterprise has informed the debtor that all communications of disputed claims, including all documents offered for the full satisfaction of a debt, must be sent to a specific person, place or body and that the act or notification has not been received by that designated person. Location or office. This provision recognizes that many businesses have accounting, mailbox or collection centres that accept a large number of cheques. In dealing with these controls, there may be involuntary agreement and satisfaction; This error can easily occur if, for example, there is a note on the back of a check that the check fully meets all claims. In order to obtain protection against this provision, a creditor must prove that it (1) has provided the debtor with a statement that all communications or instruments relating to contested claims must be sent to a specific person or place; (2) the declaration was visible and sent to the debtor before the debtor submitted the complete satisfaction cheque; and (3) the designated person or place has not received the instrument or accompanying notification. According to the UCC, there must first be a good faith dispute before an agreement and satisfaction can take place. It is sometimes difficult to determine whether or not there is a good faith dispute, but the UCC has given some clues on the subject. Whether or not a good faith dispute exists depends on whether the claim was contested in good faith. The debtor must demonstrate agreement and satisfaction as an affirmative defence, so that it must prove that it was an honest dispute regarding the appropriate fair trade standards. The unilateral refusal of a debtor to comply fully with the obligation was not a dispute in good faith; as a general rule, the debtor must prove a legitimate reason for non-payment. Similarly, intentional deception or delay will void a statement of good faith, and the debtor`s business practices may also give an indication of such a default.

For example, if a debtor regularly sends cheques with full satisfaction language, this fact indicates a lack of good faith and honesty. A federal court recently made clear the call for an honest and bona fide dispute: knowing the general principles of agreement and satisfaction can help you determine whether a debtor`s cheque should be returned or cashed; Knowing the legal importance of cashing a full satisfaction check can help you make an informed decision about whether it`s worth suing the debtor for the remaining amount. In addition, careful documentation of all communications relating to unpaid accounts is useful in determining whether a disputed claim is made in good faith. Even if an agreement and satisfaction are essentially like any other contract that requires courts to ignore evidence other than the contract itself, unless the contract is ambiguous, courts will generally allow external evidence under the UCC`s compliance and satisfaction provisions. Therefore, documenting the phone calls and letters you have received from the debtor will help you in a lawsuit. An opinion from North Carolina gives an example of the futile nature of protest words. The plaintiff, a house painter, presented a final invoice of approximately $2,400 to the defendant. The defendant complained that the bill was too high and offered the house painter a cheque for $1,813.19 with the words “painting in its entirety” on the cheque. The plaintiff accepted and cashed the cheque after telling the defendant that he had only done so because he was “in a fairly tight position” and the defendant still owed him $615.19. The court found that cashing the defendant`s cheque established consistency and satisfaction and that the plaintiff was therefore prevented from recovering another amount from the defendant.

This case clearly shows that once a creditor has notified the full satisfaction cheque, the lack of knowledge of the legal effect of cashing the cheque does not matter. This decision is just another example of how “ignorance of the law is not a defence.” A creditor or seller may not add a note to the cheque stating that the cheque is accepted in protest or only for partial satisfaction of the claim. The UCC does not allow words of protest to change the legal meaning of acceptance of an agreement and satisfaction by cashing the debtor`s check. Again, the UCC has largely codified the strict common law rules regarding agreement and satisfaction; A creditor has two options: either return or destroy the cheque, or accept the debtor`s offer by cashing the cheque. Some States have also introduced a third option that allows a creditor or seller to grant the debtor a refund of the amount of the cheque within 90 days of payment of the cheque. The purpose of this option is to prevent matching and satisfaction by mistake. Many large companies receive many checks at their accounting office, mailbox or collection center. This provision allows a company to correct its error if it finds that a match and satisfaction have been inadvertently accepted. The debtor`s mere refusal to settle the claim in full does not make it a disputed claim. If the refusal is arbitrary and the debtor knows that he does not have a fair basis, the payment of an amount less than the total amount claimed does not act as an agreement and satisfaction, although it is announced and received as such. (Emphasis added) McMahon Food Corp.c.

Burger Dairy Co. (7th Cir. 1996) The Uniform Commercial Code (UCC) has been adopted in all but one state; its objective is to simplify and modernize trade. In terms of compliance and satisfaction, Article 3-311 of the UCC follows the common law rule, with minor modifications to reflect the modern business environment. The official commentary on this section of the UCC states: “Article 3-311 is based on the belief that the common law rule leads to a fair outcome and that informal dispute resolution should be encouraged through full satisfaction audits.” The legal principle of compliance and satisfaction derives from the common law rules, which allow a creditor and a debtor to rewrite a previous contract in order to settle a dispute without legal intervention. An “agreement” is an agreement whereby one of the parties agrees to anything other than the amount believed to be owed in order to settle a disputed claim. “Satisfaction” is the performance or acceptance of this Agreement, and as soon as satisfaction occurs, the previous contract expires. Agreement and satisfaction is an affirmative defense against a breach of contract claim, in which the plaintiff must assert and prove the defense. .


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