Indorsement Of Check "Without Prejudice" Overrides Accord And Satisfaction

LexisNexis (July 6, 2017, 2:46 PM EDT) -- In a recent New York case, the court ruled that a check stated by the drawer to be in "full payment" of a disputed debt did not constitute an accord and satisfaction when it was cashed by the payee because the payee had indorsed the check "without prejudice" before depositing it.  Under New York law, that indorsement trumped the "full payment" designation contained in a letter written by the drawer.  Significantly, the New York rule has recently been changed by New York's long-delayed adoption of amendments to the UCC that eliminate the effect of a "without prejudice" indorsement and thus encourage the use of "full payment" checks as a form of alternative dispute resolution.  New York was very slow in adopting these amendments, but it seems clear that they would overturn the recent judicial decision, bringing New York into alignment with the other states on this important issue....