A contract is executed between two Indiana LLCs which obligates the payor to "pay $100 on the 1st of each month" in exchange for goods/services. No other terms are given. Payor mails a check on the first, and Payee contests that if Payor is to pay by check, the check must be enforceable by the 1st (received prior to the 1st).

We're ignoring the options of changing the contract, ACH, and credit cards since this is just a thought experiment to better understand contracts.

When is payment considered "made"? Does the answer differ if the contract is for goods vs services?

Possibly related:
Can a landlord insist on late fee for payment mailed but not recieved
Indiana incorporation of UCC § 3-203(a)

  • 1
    For what it is worth, the Uniform Commercial Code applies to purchases and leases of goods, and to checks and certain electronic transfers, but doesn't apply to contracts for services in most cases.
    – ohwilleke
    May 22, 2023 at 22:50

1 Answer 1


Payment is “made” when the money (or equivalent) is in the hands of the payee

For your situation, the payee is right.

  • 2
    I agree with you in theory, but can you provide some reference for this? I presume but am uncertain that UCC 3-203 applies for sale of goods - but I'm not familiar with anything in particular for services.
    – Mitch
    May 22, 2023 at 23:42

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