Supplier cashed our cheque...now chasing for more money

[donchano]

My husband is self-employed and has a business telephone line at home. Last year he had a dispute with the telecoms company and after much wrangling back and forth he cancelled the contract and sent them a cheque for two-thirds of the disputed outstanding amount stating that it was a 'goodwill gesture' with the intent of 'bringing the matter to a conclusion and drawing a line under it'. The company cashed the cheque immediately and did not write to him again.

This was in December 2011. Now, 8 months later, they have sent a letter threatening legal action if he doesn't pay the balance of the amount they originally demanded. It's a sum of less than £100 but he doesn't want to pay on principle because they treated him so badly.
Doesn't the fact that they cashed the cheque indicate that they accepted his goodwill offer? Thanks for any advice...

[Zacs-Master]

It indicates nothing. I believe he should have included the phrase 'In full and final settlement' but I understand that even this has been successfully challeged in court.

http://www.dwf.co.uk/...-and-final-settlement

[baza]

as they have cashed the cheque I would say that they accepted his offer, surely they should have returned the cheque if they were not happy.
I think a letter to them stating that in view of the 8 months delay in writing to him he considers the matter closed.

[donchano]

Thanks for the advice. We will write to them and see if they listen to reason!

[bednobs]

unless he has a copy of the letter sent, all they have to say is that they thought it was a partial payment

[factor-fiction]

Many years ago when i worked for a company that processed payments the mail room would slit open all the envelopes and cheques would be separated from any correspondence; the cheques would be processed and cashed quickly with the letter going to a correspondence clerk. So any letters such as yours wouldn't stop the cheque being banked

[tonywiltshire]

You are quite right Zacs the phrase “in full and final settlement” has been successfully challenged, the court will probably want to see a concession for the amount not paid such as early payment. To give added weight I would add payment is made on the understanding that they will be released from the obligation to pay the full amount.

Some solicitors will be delighted at the mention of those words “on principle” which may mean they are going to earn a great deal of money. The letter you sent with the payment may help your position; the amount of under £100 is small so action may not take place. I would try to start correspondence with the creditor as soon as possible commenting on your payment conditions and try to reach accord and satisfaction.

F30 if a company have a policy of banking money before reading the terms under which payment is made they may find some difficulty in subsequent action.

[factor-fiction]

You are right I'm sure, tony.
I wonder what would happen though if sent in a cheque to pay an invoice/bill to a supplier but wrote something on the back of the cheque to say something like "this is in full settlement of all the invoices you have sent me rather than just this one invoice and by cashing this cheque". Would the supplier be at fault if they didn't spot my note?

[tonywiltshire]

F30, I think if someone did as you suggest it would be quickly recognised as a blatant attempt to reduce liability for payment, no concession would have been offered and if it ended up in court I do not think it would have much chance of success.

If there were a number of earlier invoices the deadline for payment may have been passed and if the amount was over £750 a statutory demand may have been issued, they may also be liable for interest on the late payment if they were both acting in the course of business under the Late payments of debts (interest) act 1998, the statutory rate is 8% over base.