Payment in Full Law and Legal Definition
Payment in full means remitting all funds due to another. This language is often written on the back of a check above the place for endorsement to prove that the payee accepts the payment as complete. The terms of payment vary by contract, and occasionally a discounted price is offered to a person willing to pay in full rather than paying over time.
It may also involve a plan where the individual sells all the remaining future payments of some type, such as a lawsuit settlement, at a discounted present value for a lump sum payment. In some states, there are laws that state that cashing a check bearing the words "payment-in-full" does not result in an accord and satisfaction "if the creditor protests against accepting the tender in full payment by striking out or otherwise deleting" the notation.
The common law view is that an accord and satisfaction should only result when the claim is unliquidated or subject to a bona fide dispute. Further, the payment tendered by the debtor which gives rise to the accord must be made in good faith. Therefore, an accord and satisfaction should not be accomplished merely by sending a check to the creditor with the necessary notations included. The debtor is required to make a good faith payment on a claim which is subject to a bona fide dispute before an accord and satisfaction will result.