Question

Molly owes $10,000 on her credit card to Visa. She sends the credit card company a check for $100 with the notation “payment in full” on the check. If the credit card issuer cashes the check:

a. Molly’s balance will automatically be paid in full if the $10,000 amount was a liquidated debt.

b. Molly’s balance will automatically be paid in full regardless of whether the amount of $10,000 was liquidated or unliquidated.

c. the check may be subject to a UCC exception to the general rules for accord and satisfaction cases involving checks.

d. Molly’s balance will automatically be paid in full if the $10,000 amount was an unliquidated debt.

Answer 1

Answer: (C) the check may be subject to a UCC exception to the general rules for accord and satisfaction cases involving checks.

Explanation: When a customer remits a check against an invoice, where the value of the check is less than the amount quoted in the invoice and includes wording on the check such as “payment in full” or “full and final satisfaction of all claim”, the customer is said to be attempting “accord and satisfaction.” In such a scenario, the check may be subject to a UCC exception to the general rules for accord and satisfaction cases involving checks.