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Q: Cashing of check implied agreement...? ( Answered 5 out of 5 stars,   5 Comments )
Question  
Subject: Cashing of check implied agreement...?
Category: Miscellaneous
Asked by: mmmelly-ga
List Price: $20.00
Posted: 26 Oct 2005 15:44 PDT
Expires: 25 Nov 2005 14:44 PST
Question ID: 585359
I live in Van Nuys, California (Los Angeles County).
I gave my landlord (a property management company)a check for my June
2005  rent - $100 short of what it usually is. On the memo part of the
check I sited reduction of services as the reason for deducting $100.
(It was June and we had been without a pool since long before Memorial
Day weekend. The city had condemned the pool...).  Anyhow - the
property management company cashed the check. I assumed because they
cashed the check that implied agreement and acceptance of it. The
following month I did the same thing and my check was returned, and a
letter to pay rent or quit was issued. I felt lucky for getting $100
off the previous month so I paid my rent in full. Now, 3 months later,
my landlord wants $100 (what I had deducted from June 2005) plus the
current months rent or I will be evicted - despite the fact that the
property management company CASHED that check. My question is this: If
the property management company cashed the check, doesn't that, in
effect, make it a done deal? A contract per se? Doesnt that IMPLY that
they accepted the terms of my payment? Yikes, help!
Answer  
Subject: Re: Cashing of check implied agreement...?
Answered By: tutuzdad-ga on 26 Oct 2005 18:00 PDT
Rated:5 out of 5 stars
 
Dear mmmelly-ga;

Thank you for allowing me an opportunity to answer your interesting
question. Let me start by reminding you of our disclaimer that says we
cannot provide legal advice in this forum. What I am about to tell you
is merely the result of research about a matter of published law for
you to consider and consult an attorney about. Anything here that
might be construed as advice...isn?t ? it?s merely my unlicensed
opinion (which is the best we can do under the circumstances).

As for your question...in some case you are right; cashing a check
does indeed imply agreement. It is, however more complicated than that
(as I?m sure you?ve probably guessed already).

In statutory jargon ?implied agreement? you are referring to is
technically known as an ?ACCORD AND SATISFACTION?. Many states
recognize UNIFORM COMMERCIAL CODE (UCC) 3-311 ?ACCORD AND SATISFACTION
BY USE OF INSTRUMENT? as their basis of law.

UNIFORM COMMERCIAL CODE 
3-311 ?ACCORD AND SATISFACTION BY USE OF INSTRUMENT?
http://www.law.cornell.edu/ucc/search/display.html?terms=3-311&url=/ucc/3/article3.htm#s3-311

However, don?t let the phrase ?uniform law? confuse you:

?The phrase "Uniform Laws" can be misleading. Upon approval by the
National Conference a Uniform Law is not law anywhere in the United
States. It is simply a legislative proposal addressed to fifty state
legislatures. During the history of the Conference, roughly half its
proposals have not been adopted by a single state.?

UNIFORM LAWS
http://www.law.cornell.edu/uniform/uniform.html

Keep all this in mind because we?ll revisit this code briefly in a moment?

California does have it?s own civil code that addresses ?accord and
satisfaction? and fortunately it?s actually much simpler than the
UCC?s recommended version. California Civil Code 1526 states:

?(a) Where a claim is disputed or unliquidated and a check or draft is
tendered by the debtor in settlement thereof in full discharge of the
claim, and the words "payment in full" or other words of similar
meaning are notated on the check or draft, the acceptance of the check
or draft does not constitute an accord and satisfaction if the
creditor protests against accepting the tender in full payment by
striking out or otherwise deleting that notation or if the acceptance
of the check or draft was inadvertent or without knowledge of the
notation.

(b) Notwithstanding subdivision (a), the acceptance of a check or
draft constitutes an accord and satisfaction if a check or draft is
tendered pursuant to a composition or extension agreement between a
debtor and its creditors, and pursuant to that composition or
extension agreement, all creditors of the same class are accorded
similar treatment, and the creditor receives the check or draft with
knowledge of the restriction. A creditor shall be conclusively
presumed to have knowledge of the restriction if a creditor either:

(1) Has, previous to the receipt of the check or draft, executed a
written consent to the composition or extension agreement.

(2) Has been given, not less than 15 days nor more than 90 days prior
to receipt of the check or draft, notice, in writing, that a check or
draft will be tendered with a restrictive endorsement and that
acceptance and cashing of the check or draft will constitute an accord
and satisfaction.

(c) Notwithstanding subdivision (a), the acceptance of a check or
draft by a creditor constitutes an accord and satisfaction when the
check or draft is issued pursuant to or in conjunction with a release
of a claim.

(d) For the purposes of paragraph (2) of subdivision (b), mailing the
notice by first-class mail, postage prepaid, addressed to the address
shown for the creditor on the debtor's books or such other address as
the creditor may designate in writing constitutes notice.?

CALIFORNIA CIVIL CODE 1526
http://www.aroundthecapitol.com/code/code.html?sec=civ&codesection=1521-1526


Now, back to that Uniform Commercial Code thing...

UCC is a bit harder to interpret but it says essentially the same
thing. The fact is that California adopted UCC 3-311 in 1992 without
repealing California Civil Code 1526. This may be important to you
because you now have two ?wordings? of essentially the same law to
support your argument that what you had with your landlord, by virtue
of his acceptance and cashing of your check and notation thereon, was
an accord and satisfaction by use of an instrument. You may want to
speak with an attorney about this because, like I said, we can?t
provide legal advice in this forum.

So, clearly IF the statutory requirements described above are met by
you and were not met by your landlord, you may very well have a valid
complaint. It may be a defense however on the part of your landlord
that you were contractually bound to pay x-amount of rent or risk
being evicted, regardless of the circumstances, if in fact that is the
case in your contract. I don?t know that of course, but you understand
what I?m saying, right? If the lease requires you to pay x-amount
monthly and does not specifically make provisions for a reduction in
rent due to a reduction of services, he MIGHT be able to claim that
you failed to abide by the terms of the contract. In theory this COULD
render your claim of accord and satisfaction a moot point What your
landlord has a right to claim as his defense however is DEFINITELY
something you?d need to see an attorney about just to be on the safe
side. Especially if you plan to invest the time and money into filing
a civil action over this.

In my personal (unlicensed) opinion it?s hard to say how a court would
rule because both of you ? to some extent - failed to act in
accordance with the law:

Where YOU erred (in my opinion):

Cal. Civ Code 1526 Paragraph (a) states that the check tendered must
have the words "PAYMENT IN FULL" or OTHER WORDS OF SIMILAR MEANING
notated on it.

-*-It would be up to a court to rule if your notation ?reduction of
services? qualifies as ?other words of similar meaning? in lieu of the
words ?payment in full?.

Where HE erred (in my opinion):

Paragraph (a) states ??the acceptance of the check or draft does not
constitute an accord and satisfaction if the creditor protests against
accepting the tender in full payment by striking out or otherwise
deleting that notation??

-*-He clearly accepted the check without protest (at least initially)
and did not strike the notation, however, if he's clever, he COULD
claim that ?the acceptance of the check or draft was inadvertent or
without knowledge of the notation.?

See what I mean?

I fully agree that ?the principle of the thing? is always important,
but if I may be so bold as to offer constructive advice (which you may
take or leave) it may be prudent to sacrifice the $100 ?and? your
principles rather than risking having to live in your car as winter
approaches...But to each his own.

I hope you find that my research exceeds your expectations. If you
have any questions about my research please post a clarification
request prior to rating the answer. Otherwise, I welcome your rating
and your final comments and I look forward to working with you again
in the near future. Thank you for bringing your question to us.

Best regards;
Tutuzdad ? Google Answers Researcher


INFORMATION SOURCES

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SEARCH TERMS USED:

Implied agreement

Check

Cash

Accord and satisfaction

California Code

Uniform Commercial Code

Instrument
mmmelly-ga rated this answer:5 out of 5 stars and gave an additional tip of: $10.00
Excellent - Thank you so much for your meticulous advice and very
thorough answer. Many, many thanks, I'd ask you a question anytime  :)
Melly

Comments  
Subject: Re: Cashing of check implied agreement...?
From: sublime1-ga on 26 Oct 2005 15:59 PDT
 
I'm an officer in a condo association with experience in these
things. Cashing the check simply implies they need to be sure
of getting at least that amount from you before you stiff them
any further. Especially if they're dealing with whatever costs
are required to upgrade or remove the pool, cashing the check
simply means they need to put the money in the account to make
it available for use.

No renter has the right to arbitrarily choose to lower their 
rent, regardless of any change in services. A property mgmt
company is simply acting on behalf of the owner. Any changes
in rent would have to be negotiated with the owner.

Some owners *might* let you get away with cutting rent by the
amount you spend on paints or similar repairs (cost of materials,
usually, nothing for labor), but even this sort of agreement
needs to be made before the check is written, not suggested on
the check itself.

Simply put, you owe the $100.
Subject: Re: Cashing of check implied agreement...?
From: frde-ga on 27 Oct 2005 05:42 PDT
 
I know very little about US Law

However, my guess is that much depends on the wording of the
letter/memo that went with the cheque.

For the sake of $100, you are exposing yourself to a rather risky
situation, I suggest that you pay it at once.

You can then follow up with a claim for non-delivery of contractually
agreed services. Normally one person breaking a contract in a trivial
manner, does not allow the other party to disregard the contract.

The best words of advice I ever had from a lawyer was:
 'If you think the Law cannot be 'bought' - then think again'
Subject: Re: Cashing of check implied agreement...?
From: mmmelly-ga on 27 Oct 2005 09:40 PDT
 
Thank you for your comment - I don't consider witholding $100 for 3
months in 100 degree plus weather sans A/C or a pool (both listed as
amenities in my lease) as "stiffing" anybody - just so you know - but
your comment is valuable and I thank you for it.

Melly
Subject: Re: Cashing of check implied agreement...?
From: mmmelly-ga on 27 Oct 2005 09:42 PDT
 
The above comment was meant for Sublime - frde - I thank you too for
your take on the matter - I certainly do not want to live in my car -
winter or no - so thanks again  :)

Melly
Subject: Re: Cashing of check implied agreement...?
From: frde-ga on 28 Oct 2005 00:13 PDT
 
@mmmelly

That sounds sensible.

It might be an idea to check how vulnerable you are, if you pay up the
$100 and then start a counter claim for non provision of services.

The management company could get vindictive ...

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