I'm presuming that the amount you are paying to satisfy the debt is less than the entire amount owed. If the amount you are paying is consistent with prior negotiations, it is always better to have a separate writing signed by each of the parties acknowledging the terms of the settlement. Sometimes this can be proven by a simple chain of emails in which you send to the other party that "according to our agreement, I will pay you $x.xx in full satisfaction of the debt. . ."; and then if the other party simply replies with a confirmation email that states, "the terms you have set forth are accurate" (or words to that effect), that can be sufficient to establish evidence of the agreement. Then you would still include a reference on the check that it is in full satisfaction. What you are referring to is a "restrictive endorsement", most often it is more than a simple statement on the front memo line that it is in full satisfaction. Instead, there is a more detailed statement on the back that states something to the effect that by cashing the check the party accepts this amount in full satisfaction of the debt. You should check with your financial institution to find out whether or not such language would be acceptable to them because there are some limitations on the space in which your can write something without interfering with the processing of the check. Unfortunately, there are no sure bets when you deal with an individual as you have described. If he intends to sue you, he may still do it regardless of what you write on the check. Best of Luck to you.
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You would normally want the other party to sign a release that makes it clear that the payment is in full satisfaction of the debt and that they waive any and all further claims in connection with the debt. I recommend you hire a lawyer to draft the release and protect yourself. The "Paid in full" does not indicate what debt is paid in full.
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This strategy is one of those urban myths that sounds true, sometimes is true, but is still too risky for any lawyer to say is okay. Hope this perspective helps!
The better approach is to have the creditor sign a general and broad release of all claims, known and unknown.
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No, the phrase, "paid in full" absolutely does not protect you from being sued, although if you are sued, the fact that you did extend compensation to the aggrieved party might be relevant when it comes to quantifying damages at trial (under a common law rule known as the "collateral source rule," which may or may not be recognized by Connecticut courts). If you want protection from suit, a carefully-drafted Confidential Release and Settlement Agreement, along with payment, would be more appropriate. I would not draft, propose, or sign such an Agreement without an attorney's counsel. Hope this information, and the other excellent responses you have gotten, are helpful to you. Have a good Christmas.
Yes you can write "paid in full" on your check. You can also write the Gettysburg Address...they both have the same legal effect...none.
I agree that get a full release in writing in the form of a separate document is the best and safest measure to confirm the debt or obligation is paid in full.
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