Skip to main content



Zeller v. Markson Rosenthal & Co.

299 N.J. Super. 461, 691 A.2d 414 (App. Div. 1997)

CHECKS; ACCORD AND SATISFACTION— For a debtor to intend a check to be in full satisfaction of a dispute, it should be clearly indicated either on the check itself or on a letter accompanying the check or even orally.

A dispute arose over sales commissions owed to a salesperson by a company. The salesperson claimed she was owed $61,161.00 in commissions; the company calculated that she was entitled to only $29,802.00. The company sent her a check for $29,802.00 and the salesperson deposited it, writing “Accepted on Account” and “under protest with full reservation of rights” on the check. Neither the check nor the letter accompanying it indicated that acceptance of the check would constitute full satisfaction of the salesperson’s claim for the additional amount she thought the company owed her. At trial, the company moved for summary judgment, raising the defense of accord and satisfaction based on her acceptance of the check. The trial court granted the company’s motion, but the Appellate Division reversed and remanded.

The Appellate Division held that the company did not make clear its intent that acceptance of the check constituted full satisfaction of the dispute. For a debtor to intend a check to be in full satisfaction of a dispute, it should be clearly indicated either on the check itself, on a separate letter accompanying the check or even orally. Even though the salesperson knew the check represented the full amount of what the company thought was owed to her, the salesperson did not accept the check as full payment and satisfaction of the company’s obligation. A debtor is not protected simply because a creditor knows the check is in the amount debtor claims to be the full amount owed, because it could simply represent the amount both parties agree is not in dispute. The Court went on to state that both parties must clearly intend acceptance to be full satisfaction for an accord and satisfaction defense to be effective, otherwise accord and satisfaction cannot be the basis on which a debtor avoids further liability.


MEISLIK & MEISLIK
66 Park Street • Montclair, New Jersey 07042
tel: 973-783-3000 • fax: 973-744-5757 • info@meislik.com