payment in full

In common parlance, payment in full means satisfying everything that a debtor owes on a debt or other monetary obligation. The phrase has a separate legal significance when a debtor pays less than the amount demanded and marks the payment as full satisfaction. That kind of tender may produce an accord and satisfaction, which resolves a disputed claim or an uncertain liability. Two steps are involved for accord and satisfaction:

  • The parties agree on a substitute performance (the accord). 
  • That performance is carried out (the satisfaction).

Writing "payment in full" on a check does not, on its own, discharge the remaining balance. In states that have adopted Uniform Commercial Code (UCC) § 3-311, such as Washington, the debtor must prove each of the following to obtain a discharge: 

  • The check or other negotiable instrument was tendered in good faith as full satisfaction of the claim; 
  • The claim was unliquidated or subject to a bona fide dispute, meaning its amount was not fixed or was genuinely contested; 
  • The creditor obtained payment of the instrument; and
  • The instrument or an accompanying written communication contained a conspicuous statement that it was tendered in full satisfaction of the claim. 

Section 3-311 governs only negotiable instruments. Full-payments made by other means, such as wire transfer, ACH, or cash, are generally governed by common law accord and satisfaction. Section 3-311 gives creditors two limited ways to avoid discharge:

  • First, an organization can avoid discharge by proving the following:

    • A reasonable time before the tender, the organization sent a conspicuous statement to the debtor directing that communications regarding disputed debts, including full-payment instruments, be sent to a specific person, office, or place; and
    • The instrument and any accompanying communication were not received by that designated recipient. 

  • Second, any creditor can avoid discharge by repaying the amount of the instrument to the debtor within 90 days after the instrument was paid. 

    • This repayment option is not available to an organization that sent a designated recipient statement.

Neither path to avoiding discharge is absolute. Even if one would otherwise apply, the claim is discharged if the debtor proves that the creditor, or an agent of the creditor with direct responsibility for the disputed obligation, knew within a reasonable time before collection of the instrument was initiated that the instrument was tendered in full satisfaction of the claim. A creditor also cannot preserve its claim by adding a reservation of rights when it cashes the check. Under UCC § 1-308(b), the general rule allowing a party to reserve rights "under protest" or "without prejudice" does not apply to an accord and satisfaction. A claim discharged under § 3-311 remains discharged despite any such notation. State enactments and additional laws unrelated to the UCC may vary by jurisdiction. 

[Last reviewed in October of 2026 by the Wex Definitions Team]

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