McMahon Food Corp. v. Burger Dairy Co.
United States Court of Appeals for the Seventh Circuit
103 F.3d 1307 (1996)
McMahon Food Corp. (MFC) (plaintiff) and Burger Dairy Co. (Burger) (defendant) had a long, strained business relationship over MFC's allegedly incomplete payments for Burger's milk deliveries. After extensive negotiations, MFC sent two checks marked as full payment on its account to Burger's new manager, before Burger's own staff had a chance to verify the claim against their records; Burger's administrative personnel failed to notice the full-payment notation and cashed the checks anyway, then denied the checks actually settled the debt. MFC sued for a declaration the debt was satisfied, Burger countersued for the remaining $58,518.41, and the trial court found for Burger.
Whether a party can accord and satisfy a debt by unilaterally issuing payment without clearly indicating that the payment was made to discharge the debt.