It has long been accepted in law that a party should avoid cashing a cheque sent by the other party unless the sum is agreed. This is because it can be interpreted as acceptance that the sum paid is in full and final settlement. Case law has existed as early as 1889 in relation to whether a creditor should accept a cheque from a debtor if the amount offered is insufficient.

A groundbreaking family case was decided on Appeal yesterday, which suggests that this school of thought will also apply to settlements in Family law.

Oklahoma oil executive Harold Hamm and his ex-wife Sue Ann Arnall have been locked in a bitter divorce battle since 2012, with Ms Arnall fighting to receive a sizeable amount of Mr Hamm’s multi-billion dollar fortune. In November 2014, Mr Hamm was ordered to pay his ex-wife about $1 billion in cash and assets. Ms Arnall appealed this decision in January 2015, however in the same month Mr Hamm’s solicitors sent Ms Arnall a cheque for $957 million. At the time, the cheque was cashed and many thought that this was Ms Arnall’s indirect acceptance of Mr Hamm’s final offer. His solicitor, Mr Box was quoted as saying:

“We have received confirmation that the cheque was deposited in an Oklahoma City bank. We feel this is the end of the case from her perspective. It means she’s done and should dismiss her appeal.”

However, Ms Arnall pledged to pursue her appeal of the lower court’s decision, and did not agree that cashing the cheque was an acceptance.

A final judgment was made yesterday, and in a 7-2 decision the court ruled in favour of Mr Hamm, to dismiss Ms Arnall’s appeal. The majority of the justices said that Ms Arnall “took possession of the marital awarded to her. Those actions caused her to forfeit her right to appeal the judgment”.

Although this was an American case, the lesson to be learned from this case is that one should never cash a cheque or acceptance a financial payment unless they are sure that the sum being paid is agreed. If you are not sure, you should send the cheque back or return the money received and confirm that the sum is not accepted so as to avoid any confusion.

Victoria Clarke – rhw Solicitors LLP

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