"Full and final settlement" - legally binding?

[imsorryiasked]

If you send a letter enclosing a cheque stating that the payment is in full and final settlement of a debt, and the creditor cashes the cheque, are they legally considered to have accepted the offer?
The creditor is now pursuing interest on the debt and I need to know if they are able to do this our are just trying it on.
Many thanks

I once had to look it up and there seemed to be loads of different case law on it. I tihnk you can write back and say you will accept it in part payment and then pay it in which is why lawyers would have both sides sign a full and final settlement agreement in advance of any payment I suppose.

I'm a solicitor. I would write back and say you accepted my offer which clearly stated it was in full and final settlement of the debt. I would say no more than that. The reality is the interest is likely to be so low that they won't pursue it.

Thanks for your replies. Unfortunately the interest will be substantial so I don't think they will give up on it lightly.
It relates to an old debt on nursing home fees which I'm trying to sort out for a relative. I spoke to the council by phone and was told there would not be an interest charge, although we were expecting one. I checked with the manager of the first person who also confirmed no interest, but they are now saying there is.

Hi OP, what was the time lapse between them cashing them cheque and letting you know that they didn’t accept it as full and final settlement?

I assume the letter you sent with the cheque was where you expressly stated it was full and final settlement?

I thought the part payment in full &final only works if it's a third party paying (the Indian tailor case, my brain from 30 years ago law school mutters)

Mind you, if it is in fact not your debt, that may be exactly the answer.

With whom was the nursing home's contract?

I have always thought that sending a payment in f and fs ,although it can be a useful tactic, does not work unless the creditor accepts it on that basis,and them simply cashing the cheque is not enough
Best to offer settlement on that basis,wait for them to accept then send the cheque

I thought the part payment in full &final only works if it's a third party paying (the Indian tailor case, my brain from 30 years ago law school mutters)

I remember that as well.

Yes, that tallies with when I last had to look it up. It's not as simple as people think which is why lawyers like people to sign full and final settlement agreements before money is paid.
However if here there is substantial interest due they may sue for it will be worth putting in a defence on the basis above just to try and secondly to mention they had said on the phone no interest was due as possibly that was "agreed".

Hi all. They advised by phone no interest in early January and were supposed to send a statement of account confirming but they didn't.
The debtor paid by cheque on 22nd Feb and the letter with the cheque stated payment in full and final settlement.
I believe this was cashed immediately but would need to check the bank statement to confirm.
The creditor had not been in touch at any time, not even to acknowledge - I obtained a written receipt for the letter when I hand delivered it.
It is only now I have been in contact by phone and email to try and get confirmation from them that they have responded to say there will be interest payable.

As ever with legal things it’s not black and white, but if the cheque in “full and final settlement” was cashed in February and it’s only at the end of April they are suggesting it was taken in part payment then I think you are in quite a strong position.

It may also in practice depend who you are dealing with eg a massive power company who has sold the debt on to external agents might be very bad at keeping records up to date and might have a vested interest in seeking every last penny whereas if a client is late in paying me I have never even though I am allowed bothered to claim interest.