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Update to: Cash A Check ~ Waive a Claim,

By Theresa Crawford Tate Crawford & Bangs, West Covina, California

Subsequent to the posting of the article entitled, Cash a Check~ Waive a Claim, San Bernardino County Appellate Department in Woolridge v. J.F.L. Electric, Inc. (2002) 96 Cal.App.4th Supp.52 (2002), held that the more recent statute Commercial Code section 3311 supplanted the earlier statute Civil Code section 1526, thereby making it clear that if a creditor cashes a check marked “payment-in-full” or marked with words of similar meaning, the creditor will have effectively waived his or her claim to further payment (even if those words are crossed out). Nonetheless, it is important to note that this holding is only binding authority for courts in San Bernardino County. The matter is still unresolved with respect to the majority of California courts. The Woolridge decision, however, may be used to persuade courts in other jurisdictions that Commercial Code section 3311 should prevail over Civil Code section 1526.

Thus, for creditors in San Bernardino County, cashing a check with any type of notation indicating that the check was issued as a final settlement or as full payment, will mean a waiver of your claim to additional funds. Further, cashing this type of check anywhere in California is still a risky undertaking if you have additional claims against the debtor.

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