# Final Payment check does not include extra charges, should I cash it?



## Right-Way (Oct 26, 2010)

Job is complete. Customer was billed for final contract payment plus extras incurred. Customer sent check for final contract payment only and wrote in memo "Final". If I cash this can I still hold them legally responsible for extra charges too, or will this acceptance of this check be considered payment in full and extras no regainable?


----------



## EthanB (Sep 28, 2011)

If you have signed change orders or contracts for the "extras" then they owe you money. If you don't then they legally don't owe you money. The check amount and memo has no bearing on it.

Look at it this way. If the phone company(who you have a contract with) sends you a bill for $80 and you send them a check for $50 with a memo saying "Final" you still owe them $30. On the other hand, if I were to send you a bill for $80 out of the blue with no contract then you don't owe me a dime.


----------



## skyhook (Mar 17, 2007)

Right-Way said:


> Job is complete. Customer was billed for final contract payment plus extras incurred. Customer sent check for final contract payment only and wrote in memo "Final". If I cash this can I still hold them legally responsible for extra charges too, or will this acceptance of this check be considered payment in full and extras no regainable?


Cash the check, learn from it and move on. Next time keep your Ps and Qs in order. Nobody likes to get screwed that way.


----------



## Chris Johnson (Apr 19, 2007)

Cash the check and than follow up with payments for the extras. Act dumb when they talk about the last check being final as stated, claim yes final for the contract but there are still extras outstanding.

You never know...they may pay you on full...what a novel concept


----------



## CO762 (Feb 22, 2010)

Right-Way said:


> Customer sent check for final contract payment only and wrote in memo "Final".


Guess customer answered your question for you.


----------



## Inner10 (Mar 12, 2009)

Cash it and send them a bill for the balance. :thumbsup:


----------



## bconley (Mar 8, 2009)

One person may not unilaterally alter a contract.

When you are owed money by a person, you can cash a check for less than the full amount due to you without writing off the balance or accepting that check as payment in full.

You have to credit it against the balance owed, but that’s the only obligation.
Of course, you can decide to accept less than the full payment, if you think that’s the most you’re going to get.

But that must be your choice—it can’t be unilaterally forced on you.


----------



## Michaeljp86 (Apr 10, 2007)

Sounds like you didnt agree on something. Id cash it and then bill them again. Depending on the amount then go after them if they dont pay it if you can.


----------



## thomasjmarino (May 1, 2011)

The word "Final" is way too vague in this instance.
Final what?
If they wanted to screw you out of the money for the extras, they should have been smarter and wrote, Final payment - Job complete or something to that effect.
I would cash the check and bill them for the extras.
BTW, too many of us do extra work without having change orders signed with amounts specified before doing the work.
That's a big no no in this business!!! :no::no:

If you didn't do change orders on this job, start doing them with the next!


----------



## Michaeljp86 (Apr 10, 2007)

thomasjmarino said:


> The word "Final" is way too vague in this instance.
> Final what?
> If they wanted to screw you out of the money for the extras, they should have been smarter and wrote, Final payment - Job complete or something to that effect.
> I would cash the check and bill them for the extras.
> ...


Ive done that a few times.:whistling


----------



## Tinstaafl (Jan 6, 2008)

I'm not aware of the "Memo" field on a check having any legal status at all. It's simply there as a bookkeeping convenience for the account holder.

Cash it and re-bill for the remainder.


----------



## txgencon (Jan 4, 2011)

You could wash the note off the way pros do.


----------



## cleveman (Dec 28, 2007)

you won't know what will happen until a judge rules.

then you can maybe appeal that.

keep us posted.


----------



## Right-Way (Oct 26, 2010)

*To all that replied*

Thanks for all the input, sure will help. Think I am gonna cash it and then rebill for the new amount (Extras). Goes to show you cant trust any one when it comes to money. Will keep you posted on billing resolution.


----------



## Diamond D. (Nov 12, 2009)

Just to throw in my two cents, I'd double check with an attorney, before cashing that check.

I had a similar situation years ago, I can't remember all the details, but it was something along the lines of, By you depositing/cashing the check with the memo "final payment" or maybe even "final", you accept the terms as final and that the debt is satisfied and therefor closed.

I'd sit on the check for a while and get out the invoice for the extras, post haste.

Good luck,
D.


----------



## SAW.co (Jan 2, 2011)

thomasjmarino said:


> too many of us do extra work without having change orders signed with amounts specified before doing the work.
> That's a big no no in this business!!! :no::no:
> 
> If you didn't do change orders on this job, start doing them with the next!


This thread is a bit of an eye opener I very rarely have change orders singed prior to completing the work & in most cases not at all. Altho I have not yet had a problem with getting paid. Usually for me change orders are pretty small, less than $500. But I think I'm going to start sending them out anyway.


----------



## Michaeljp86 (Apr 10, 2007)

Diamond D. said:


> Just to throw in my two cents, I'd double check with an attorney, before cashing that check.
> 
> I had a similar situation years ago, I can't remember all the details, but it was something along the lines of, By you depositing/cashing the check with the memo "final payment" or maybe even "final", you accept the terms as final and that the debt is satisfied and therefor closed.
> 
> ...


Even still I think it depends on the ammount. Those extras would need to be expensive for it to be worth talking to a lawyer. 

At the same time Id cash it, you would hate to sit on it while they get the idea to cancel the check.


----------



## blackbear (Feb 29, 2008)

I have a stack of change orders in the truck ready to go at all times. I have bills to pay, no free rides on this train. Last job I handed out 9 change orders for over 2g, signed on the spot. Nickles and dimes eventually add up to dollars.


----------



## Right-Way (Oct 26, 2010)

Right-Way said:


> Job is complete. Customer was billed for final contract payment plus extras incurred. Customer sent check for final contract payment only and wrote in memo "Final". If I cash this can I still hold them legally responsible for extra charges too, or will this acceptance of this check be considered payment in full and extras no regainable?


Its Been Over 8 Months past due for extra charges I am charging intrest of 8% each month what do you think
We do have a writen agreement for the extra costs He even says " I aint gonna pay for extras"


----------



## 480sparky (Feb 1, 2009)

Right-Way said:


> ...I am charging intrest of 8% each month what do you think.......


Is that legal?



Right-Way said:


> ...He even says " I aint gonna pay for extras" .......


Your lien window is probably closed. I think you're gonna get screwed no matter what. You can try the courts, but all they can do is get you a judgement.


----------



## BamBamm5144 (Jul 12, 2008)

Right-Way said:


> Its Been Over 8 Months past due for extra charges I am charging intrest of 8% each month what do you think
> We do have a writen agreement for the extra costs He even says " I aint gonna pay for extras"


Tell him you will file a lien and continue to charge interest every month until the amount gets to be so large that a court hearing will have to happen.

Next time, don't let it get this far.


----------



## MKnAs Dad (Mar 20, 2011)

Might want to find out the max you can charge for interest. Also, does it state in your contract that
you will charge interest?
If you haven't done it already, file a lien on the property. It may scare them into paying. If it its filed, any refinancing might require payment before approval.


----------



## BamBamm5144 (Jul 12, 2008)

480sparky said:


> Is that legal?
> 
> 
> 
> Your lien window is probably closed. I think you're gonna get screwed no matter what. You can try the courts, but all they can do is get you a judgement.



I believe it is legal to charge whatever you want for interest as long as the customer agrees to it in the contract. I am currently at 4% for anything due past 7 days then another 4% for every 30 days there after.

I am thinking about changing it to 4% within 7 days then every 7 days thereafter is another 4%. I am going to check to see if I can do that first though.


----------



## glkirk (Nov 27, 2011)

I don't have much for mumbo jumbo in my contracts but I do have "Please, any changes submitted and approved in writing and paid in advance"


----------



## 480sparky (Feb 1, 2009)

BamBamm5144 said:


> I believe it is legal to charge whatever you want for interest as long as the customer agrees to it in the contract. I am currently at 4% for anything due past 7 days then another 4% for every 30 days there after.
> 
> I am thinking about changing it to 4% within 7 days then every 7 days thereafter is another 4%. I am going to check to see if I can do that first though.



State laws may say otherwise. You're basically charging 700% per annum.


----------



## BamBamm5144 (Jul 12, 2008)

480sparky said:


> State laws may say otherwise.


Just made a call. 5% is the maximum legal about you can charge unless otherwise agreed upon to in writing.


----------



## 480sparky (Feb 1, 2009)

BamBamm5144 said:


> Just made a call. 5% is the maximum legal about you can charge unless otherwise agreed upon to in writing.


5% per......?? Day? Week? Month? Year?


----------



## BamBamm5144 (Jul 12, 2008)

480sparky said:


> 5% per......?? Day? Week? Month? Year?


Sorry - 5% over the "legal rate" yearly unless agreed upon in writing.

Otherwise, none of that really matters as soon as they sign the contract.


----------



## CarpenterRN (Dec 3, 2009)

Around here I believe it's 1.5%/month (18%/year) unless it's a revolving account, then it can go higher (don't know what the max is.)


----------



## thom (Nov 3, 2006)

Right-way, if you think he will ever pay voluntarily, you're living in la-la land. 

You can:
1) kiss your money goodbye
2) hire Guido
3) sue


----------



## larryb (May 23, 2008)

First, remind the customer of the "extra's". Did they agree to them through change orders or did you just agree to do the work? Either way, if you did the work, they owe you the money. If a small amount, probably not worth worrying about. If a larger amount, discus it with them. If they are trying to underpay the real final due, maybe they'll agree to pay part of it - split it with you or maybe pay the full balance due. Talk with them first to find out where they are at. That will help you to determine what course of action to take. They might just be hoping you'll accept the "less than" final payment and eat the rest and move on.


----------



## Right-Way (Oct 26, 2010)

*Crazy Customer Now Billed Me*

Just to update all of you on this issue. I recently sent out another bill to customer for the extras owed and included interst. They in return, sent my billing back to me along with a bill to me from them. Lol They are trying to counter charge me for several issues they claim, that I was NOT made aware of till now, and they fixed (supposable fixed) themselves. The things they listed, amazonly add up to roughly the same amount as the extras that I have been billing them for.

I think it's time to let a Judge rule on this issue. 

My question is: Would their charges to me hold up in court, even though I was never made aware of these "problems" before and so never had a chance to address them myself at my own exspense? :confused1:


----------



## Michaeljp86 (Apr 10, 2007)

Right-Way said:


> My question is: Would their charges to me hold up in court, even though I was never made aware of these problems before and so never had a chance to address them myself at my own exspense? :confused1:


I would think it would depend on what the problem was and if they had proof of your screw up, like pictures of a crappy paint job. Or doorknobs put on inside out. If it was something you could obviously see and still let it go.

If it was a easy mistake like forgetting about a finish nail head sticking out of some trim I dont see it working out with them not telling you.


----------



## BamBamm5144 (Jul 12, 2008)

Depends on your state. Do you have a "right to cure" law? 

Let's say I break a window on a tear off, that customer can't go find a guy to install the window then bill me whatever amount he wants. There is a long and lengthy process.

Ignore the bill and send a final notice letter (certified). In this letter make sure they know that if payment is not received within 10 business days of the letter, legal action will begin and they will be responsible for all costs incurred.


----------



## ranteso (Nov 11, 2010)

Your problem was the result of poor communication, simple as that. 

http://www.youtube.com/watch?v=Oik6dXm-0l0&feature=related


----------



## Framer53 (Feb 23, 2008)

Right-Way said:


> Just to update all of you on this issue. I recently sent out another bill to customer for the extras owed and included interst. They in return, sent my billing back to me along with a bill to me from them. Lol They are trying to counter charge me for several issues they claim, that I was NOT made aware of till now, and they fixed (supposable fixed) themselves. The things they listed, amazonly add up to roughly the same amount as the extras that I have been billing them for.
> 
> I think it's time to let a Judge rule on this issue.
> 
> My question is: Would their charges to me hold up in court, even though I was never made aware of these "problems" before and so never had a chance to address them myself at my own exspense? :confused1:



It won't hold up as the Judge is not stupid.

now are the charges legitimate?

If your ducks are in a row, take them to court then get back to us and we can tell you how to collect or not depending on your state......:whistling


----------



## Tiger (Nov 21, 2007)

A tip for the future:

Payment for changes are due in full, in advance. In other words, no payment, no change. It simplifies the whole collection process.


----------



## barry1219 (Oct 8, 2011)

I have not been burned in this situation before. I also have not had to deal with a memo that said final unless it was the final payment.
Make a phone call before you cash it and let them know about the extras and politely put it this way.." Thank you for final payment on original contract amount due. Should I bill you net 30 for the extras or bring an invoice over with receipts for all the extras and we can settle up in person?"
I word my contracts that any change orders or extras incurred are due when incurred. Not to be included in any draws unless otherwise agreed.
I just hit a milestone on a recent contract and about $2k was due. In the past week they added about $1400 in extras to the contract and when I collected my draw that was $2k I additionally picked up the extras so the check was $3400. It has to be that way or you can find yourself in a grey area about where extras fall in the contract and you should not have to wait on $$ you already expensed in goods or incurred in labor costs. Be smart and learn from this and treat the business side of contracting as serious as you would building a high end house.
Good luck and start with a phone call. Be polite. If they get short with you...don't lose your temper...stand your ground politely and firmly. If that does not work..mail an invoice with copies of receipts. Communicate through the mail and work through it. Hopefully you don't need to get into a drawn out legal thing.


----------



## d-rock (Oct 17, 2009)

HA HA HA...this is near and dear to my heart. In the commercial world in NYC this is common practice with many GC's. I learned the hard way. Even if I had emails from them confirming change order price and scope, in the end they say "your final balance is X" you will notice its very light on the last few change orders. Then you have to make a decision, do you lien or sue for 3-5K on a 200K project? I did not b/c overall the job was profitable, but next time i will not accept email confirmation. Strictly contract addendum. If its a big rush they will get the paper work done quickly. Believe me, most GC's seem to respect a sub more when you professionally let them know they can't push you around. Fair is fair.


----------



## d-rock (Oct 17, 2009)

I forgot to add that they've given us some good business, so why rock the boat? Just learn to navigate better.


----------



## Right-Way (Oct 26, 2010)

*Update on Extras owed by customer*

Just wanted to update everyone on this issue. I have been billing customer monthly with interest and even let them know if not paid by certain date all warranties are void. They have yet to make payment, however they also never billed me a second time either. I am taking them to court on June 18, 2012. I will keep you informed of the outcome!

In the future all extras will be signed and paid for in advance, no exceptions.


----------



## sunkist (Apr 27, 2012)

contract=contractor, sign here! x amount for x work, change your mind sign here, change scope of work sign here, upgrade tile sink sign here, here you go judge thats where he/she changed there mind that week for the 4th time, pay here!!!!


----------



## cabinetsnj (Jun 10, 2012)

If you have a signed work order separate from the original bill you should be fine. Just because someone gives you a check that says final on it, doesnt mean that thier bill is neccesarily paid in full. If you have a dispute with the final amount, and you have records for that then you should be fine cashing thier check, and still be able to collect the funds still owed to you.


----------



## Right-Way (Oct 26, 2010)

*Now homeowner is counter sueing*

LMOA Just to update on the court case of contractor vs. homeowner. Friday June 15th at 3:30 homeowner's attorney filled w/ court a countersuit for 10 times the amount I was origionally sueing for, to pay for my extras incurred. Court date to be rescheduled now. I hired an attorney. They r claiming I was "unjustly enriched" because homeowner pd the final pmt to me at end of job (lmao) and that I failed to complete tasks in a "workmanlike manner". This is 7-8 monthes later and only after I sued first! People!!!! :confused1::


----------



## Gary H (Dec 10, 2008)

keep us posted. It bites that they pulled that on you. I have a vested interst in this because, I went though it. I also know one builder that will not sue for any balances owed under 5 grand. He says that by the time you hire a lawyer and your personal time its not worth it.


----------



## Shellbuilder (May 14, 2006)

roomdanis said:


> i didn't read everyones reply but when i get a check that reads final that means they are paying you off in full for everything.
> 
> Don't cash it and call them up and ask for the rest of your money and then you go over there and get the other checks from them and cash those. The final check you cash last.


you sign on the back, "accepted with prejudice" when depositing.


----------



## dujow (Mar 2, 2011)

hey Right-Way, any update on your court case?


----------



## cabinetsnj (Jun 10, 2012)

bconley said:


> One person may not unilaterally alter a contract.
> 
> When you are owed money by a person, you can cash a check for less than the full amount due to you without writing off the balance or accepting that check as payment in full.
> 
> ...



Exactly. And you will see how difficult it will be to get the extra money out of them.


----------



## Leo G (May 12, 2005)

Right-Way said:


> Just to update all of you on this issue. I recently sent out another bill to customer for the extras owed and included interst. They in return, sent my billing back to me along with a bill to me from them. Lol They are trying to counter charge me for several issues they claim, that I was NOT made aware of till now, and they fixed (supposable fixed) themselves. The things they listed, amazonly add up to roughly the same amount as the extras that I have been billing them for.
> 
> I think it's time to let a Judge rule on this issue.
> 
> My question is: Would their charges to me hold up in court, even though I was never made aware of these "problems" before and so never had a chance to address them myself at my own exspense? :confused1:


They have to inform you of the problem and let you try to fix it. They cannot just have someone come by and fix it and then send you a bill with no earlier notification. It won't fly in court.


----------



## black95gt (Nov 25, 2012)

bconley said:


> One person may not unilaterally alter a contract.


unless you are the Federal Government. They unilaterally modify contracts all the time per allowance in the Federal Aqcusition Regulations (FAR). The FAR allows the contractor to dispute and they just figure it out in court after the project.


----------



## superpresence (Feb 5, 2013)

if it says final in the memo section and you cash it, that means they do not owe you the remaining balance. more money has been stolen by pen than by gun


----------



## skyhook (Mar 17, 2007)

Right-Way said:


> Its Been Over 8 Months past due for extra charges I am charging intrest of 8% each month what do you think
> We do have a writen agreement for the extra costs He even says " I aint gonna pay for extras"


All you are doing now is alienating yourself from your customer. 
Any chance of word of mouth referals is long gone.
What you're getting from him now is bad mouthing. 
Did you cash the check.?


----------



## Bodger (Oct 23, 2008)

superpresence said:


> if it says final in the memo section and you cash it, that means they do not owe you the remaining balance. more money has been stolen by pen than by gun


Can you post a link to a statute or legal precedent that supports this claim?


----------



## EmmCeeDee (May 23, 2010)

superpresence said:


> if it says final in the memo section and you cash it, that means they do not owe you the remaining balance. more money has been stolen by pen than by gun


Edit: This may be the case, but only in the absence of a signed contact.


----------



## Leo G (May 12, 2005)

I have one word for you Bodger.

Lawyers.

I don't think he meant the final payment memo on the check was the main cause for this.


----------



## Shellbuilder (May 14, 2006)

You accept check "without prejudice" written on check. In an earlier post I wrote "with prejudice" but whatever nobody commented. Look it up on google. Heres a link if you're too lazy to google it. http://www.justanswer.com/consumer-protection-law/4kv6t-endore-check-want-clear.html


----------



## Shellbuilder (May 14, 2006)

Another http://www.bankersonline.com/operations/guru2004/gurus_op051704d.html


----------



## Leo G (May 12, 2005)

Shellbuilder said:


> You accept check "without prejudice" written on check. In an earlier post I wrote "with prejudice" but whatever nobody commented. Look it up on google. Heres a link if you're too lazy to google it. http://www.justanswer.com/consumer-protection-law/4kv6t-endore-check-want-clear.html


This doesn't cover this particular situation. The lawyer said it had no language on it to indicate it was meant to be the final payment.


----------



## Roofcheck (Dec 27, 2011)

People are funny. Reading and interpreting Contracts are two very different things. If a check is not accurate I give it back and request the correct amount. 

My lawyer is my friend you and everyone in business dealing with any substantial amount of cash should as well. 

Referrals? If they are not going to pay you they are not going to refer you thats a fact!


----------



## Builder Butch (Jan 30, 2012)

Man that sucks! I've been through this before. I had a guy write final payment on his check and the judge did not make him pay the remaining balance. In over 25 years in business I've always done business with a handshake. I hate it but I just cant do it anymore. I was getting screwed way to often. I still get grief when I ask for a signed change order but tough chit! They sign or I walk. and I still sometimes have slow payment even with change orders. People are slick these days.


----------

