Does cashing a check prevent the ability to pursue a company for a related contractual amount?

Question

Backstory:

06/05/2017: Here is the relevant post for some additional clarity on the matter: Arbitration Clause Account Credits vs Money Stipulation.

I went through arbitration with a company after some issues with a promotional credit obligation not being fulfilled appropriately. Everything with that case has seemingly been complete and they've sent the check for the amount that the arbitrator awarded.

However, their Customer Service Agreement has a clause that may result in them paying an increased amount (about 5x the awarded amount). There's definitely back-and-forth between us on whether they need to pay that or not. The arbitration service is CC'd on all the emails, but they're passive since the clause doesn't seem to involve them changing the reward amount.

I've had the check for about a week now and I'm considering cashing it to cover some financial obligations coming up in the next week or so. I'm here to try and understand what limitations may pop up if I do decide to cash the check.

Questions:

• If I cash the check, will I ruin my opportunity to keep pursuing them for the increased amount?

• Is there any merit to me sending them an email stating that I'll be cashing the check due to financial needs, but that the act of me doing that is not settling for the amount they paid (if that even has any legal ground)?

Answer 1

It is hard to know what options you have, without knowing the arbitration clause itself. Item 6 in the agreement in the earlier post refers to a situation where the company makes an offer and the arbitrator awards more. If you have not accepted their offer or they don't make one (and the arbitrator wards you something) then:

IF YOU DON'T ACCEPT THE OFFER AND THE ARBITRATOR AWARDS YOU AN AMOUNT OF MONEY THAT'S MORE THAN OUR OFFER BUT LESS THAN $5,000, OR IF WE DON'T MAKE YOU AN OFFER, AND THE ARBITRATOR AWARDS YOU ANY AMOUNT OF MONEY BUT LESS THAN $5,000, THEN WE AGREE TO PAY YOU $5,000 INSTEAD OF THE AMOUNT AWARDED.

You indicate that the arbitrator awarded something, and that you rejected there offer. If the arbitrator didn't award more that $5,000, then they AGREE TO PAY YOU $5,000 INSTEAD OF THE AMOUNT AWARDED. Plus costs.

The issue then is whether you would have "accepted" the lesser award by cashing the check (which could be signaled by words like "payment in full"). The concept of accord and satisfaction is relevant, and probably spelled out in your state's commercial code (or their state's commercial code, more likely).

Since they aren't voluntarily complying with their contract, you probably should not do anything that could be construed as "accepting" the offer, but here you really need to ask your attorney (who will scrutinize the entire agreement). If it is required that you submit all legal questions to binding arbitration, then this particular clause would have to be submitted to arbitration (unless they simply "forgot" the clause, or have a strategy of ignoring it until it is pointed out). Perhaps there is a shorter path where you directly sue them.

Answer 2

Cashing the cheque does not relieve them of any other liabilities they may have.

However, they almost certainly don't have any. You say your dispute has been arbitrated and a decision has been reached - if so then, providing the arbitration was conducted in accordance with the law (i.e. can't be appealed) then the matter is closed. If you have now found something you should have raised in the arbitration then you should have raised it in the arbitration. The law does not allow arguing the same dispute more than once, trying to do so is called 'abuse of process', you had your chance, you missed it.