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ARTICLE · 24 JUNE 2010

Part Payment of Debts - Should You Deposit That Cheque?

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Can a debtor make a part payment of a debt and stipulate that by banking the cheque, the creditor accepts that the debt has been paid in full?

AustraliaFinance and Banking
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In brief

Can a debtor make a part payment of a debt and stipulate that by banking the cheque, the creditor accepts that the debt has been paid in full?

Cheques for partial payment of debts

Sometimes, our clients who provide goods and services receive cheques for less than the amount owed.

On occasions, thankfully rare, the payments come with a letter stating that the payment is tendered in full and final settlement of the entire debt. Other letters may say that by banking the cheque the creditor accepts the payment in full and final settlement of the debt. If the cheque is banked, does the law allow the creditor to sue for the balance?

JP Morgan and Consolidated Minerals

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