This is what I found on the code and also pennsylvania's stand on the code...however, I'm still confused...all I want to know is can I and can I not do it??? § 3-311. ACCORD AND SATISFACTION BY USE OF INSTRUMENT. (a) If a person against whom a claim is asserted proves that (i) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (ii) the amount of the claim was unliquidated or subject to a bona fide dispute, and (iii) the claimant obtained payment of the instrument, the following subsections apply. ( Unless subsection © applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim. © Subject to subsection (d), a claim is not discharged under subsection ( if either of the following applies: (1) The claimant, if an organization, proves that (i) within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office, or place, and (ii) the instrument or accompanying communication was not received by that designated person, office, or place. (2) The claimant, whether or not an organization, proves that within 90 days after payment of the instrument, the claimant tendered repayment of the amount of the instrument to the person against whom the claim is asserted. This paragraph does not apply if the claimant is an organization that sent a statement complying with paragraph (1)(i). (d) A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim. When a check for a lesser amount marked "paid-in-full" is submitted to a creditor and the debt is not disputed, deposit of the check by the creditor will not discharge the debt. But what happens if the debtor claims that the account was disputed and someone else in the corporation knew about the dispute? This situation often arises where a debtor mails a check to a large corporation and the department receiving the check is different from the department which charged the debtor. This dilemma is addressed by U.C.C. section 3-311, which clearly states that a debtor cannot use a paid-in-full check to discharge a claim if: 1. the payee is an organization. 2. if the organization has communicated to the other party that an offer of full payment is to be sent to a particular person, office, or place. 3. the check was not received by the designated person, office, or place. The "paid-in-full" check is treated as a partial payment and not an offer to settle unless it meets the above requirements. Unfortunately this rule is not absolute, because the debt will be settled if the recipient of the check had knowledge of the dispute. The purpose of the section is to prevent an accord and satisfaction from taking place when a check is sent to an automated collection center or a large corporation and is cashed without inspection. In the commercial world, hundreds of thousands of checks are processed daily by merchants and corporations. These parties are neither equipped nor is it economical to inspect every check for the purpose of avoiding an inadvertent accord and satisfaction. The section thus prevents a clever debtor from pulling a fast one by slipping a full settlement check through the system to pay less than the full amount on a disputed debt. One may revoke an accord and satisfaction within 90 days by fully repaying the amount received. A summary of the state laws is contained in Appendix IV. Nevertheless, some of the states have modified section 3–311 and have either excluded certain parts of the statute or have included additional wording. Section 3-311, a compromise of the common law and the interpretation of UCC 1-207 (subdivision 2), has been adopted in Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Massachusetts, Missouri, Nebraska, New Jersey, Pennsylvania, Texas, Utah, Virginia, Wisconsin, Wyoming. Many other states may have also adopted section 3-311 since we have not done a survey of all the states. In most of the states section 3-311 has been proposed as a compromise and is working its way through the legislatures. We do know that New York still follows UCC 1-207 which allows the recipient to deposit a check marked paid in full utilizing the magic words in the UCC and receiving the money and thereafter suing for the balance.