PLM, Inc., entered into an oral agreement with Quaintance Associates, an executive
PLM, Inc., entered into an oral agreement with Quaintance Associates, an executive “headhunter” service, for the recruitment of qualified candidates to be employed by PLM. As agreed, PLM’s obligation to pay Quaintance did not depend on PLM’s actually hiring a qualified candidate presented by Quaintance. After several months, Quaintance sent a letter to PLM, admitting that it had so far failed to produce a suitable candidate, but included a bill for $9,806.61, covering fees and expenses. PLM responded that Quaintance’s services were worth only $6,060.48 and that payment of the lesser amount was the only fair way to handle the dispute. Accordingly, PLM enclosed a check for $6,060.48, writing on the back of the check “IN FULL PAYMENT OF ANY CLAIMS QUAINTANCE HAS AGAINST PLM, INC.” Quaintance cashed the check and then sued PLM for the remaining $3,746.13. Decision?
This can be the case of the settlement of a disputed debt, where a dispute arises that is related to the amount or existence of the agreement. Here, the dispute is also on the amount.
Company Q has cashed the check, which means acceptance. In case of disputed debt, a company can either accept the payment of whatever amount is made to them in full settlement or can reject the whole amount. Company Q cannot accept payment in full settlement and then sue Company P.
Judgement is going to be in favor of Company P because Company Q has accepted the payment in full settlement against their services.