The plaintiff builders had invoiced and pursued a revised account of andpound;10,163 after the defendants had disputed a number of items. The defendants ultimately offered a cheque in the sum of andpound;8,471 in full and final settlement of all charges, which the plaintiff cashed upon receipt and which cleared after five days. The plaintiff then pursued the balance, calling the defendants to inform them of their intentions two days after the cheque had cleared.
Held: Retaining the cheque was not conclusive of acceptance and it was a question of fact as to what terms the cheque was kept on. Although both the cashing of the cheque and a delay before rejection of the offer was evidence of acceptance they were not conclusive. The matter was one of fact.
In this case, the delay before rejection was brief and it was concluded that the plaintiff had not caused the defendants to think that the money was taken in satisfaction of the claim.
Lloyd LJ said: ‘As with any other bilateral contract what matters is not what the creditor himself intends but what by his words and conduct he has led the other party as a reasonable person . . to believe’ and ‘Cashing the cheque is always strong evidence of acceptance, especially if not accompanied by immediate rejection of the offer. Retention of the cheque without rejection is also strong evidence of acceptance depending on the length of the delay. But neither of these factors are conclusive, and it would, I think, be artificial to draw a hard and fast line between the cases where the payment is accompanied by immediate rejection of the offer and cases where objection comes within a day or within a few days.’
Judges:
Lloyd LJ
Citations:
Times 22-Feb-1993, (1994) 2 Lloyds Reports 13, Independent 09-Feb-1993, [2003] TCLR 8
Jurisdiction:
England and Wales
Citing:
Cited – Hirachand Punamchand v Temple CA 1911
The defendant, a British army officer in India, had given a promissory note to the plaintiff moneylenders. Unable to pay, he suggested they apply to his father, Sir Richard Temple. In reply, Sir Richard Temple’s solicitors wrote saying they were . .
Cited – Day v McLea CA 1889
The fact alone that a person receives and accepts a cheque offered in full and final settlement of the person’s claim for a higher sum does not create an accord and satisfaction. There is only an accord if there is an agreement whereby the person . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 18 May 2022; Ref: scu.521152