Hey Rob -

I don't think the memo field is legally binding at all. The reason I know this is because I had a roommate who would give me rent checks (for his half of the rent) and every time, EVERY time, he would write "For sexual favors" in the memo field.

Obviously this was not true, otherwise either he or I would be in court for slander!

Really, the important thing is your invoices - THOSE can be brought into court showing exactly what services you provided (or in my case DIDN'T provide!) Make sure you keep copies of what you're sending to your clients, as well as the co-ordinating check number they gave you, and you should be gold.
Source(s):
Past experience and mad friends.

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The concern you have is over "restrictive endorsements"; where by endorsing the cheque causes you to agree some requirement.

You need to be worried about terms such as "Paid in Full" or some such. This has be widely debated and the exact behaviour is dependent upon the legal jurisdiction and established case law.

In all cases the cheque signer must establish that the Memo clearly established some kind of requirement on the casher.

In situations where there is no legal language ("websites") it is clearly a reminder to the check writer and would have no legal binding on the casher.
Source(s):
http://research.lawyers.com/glossary/restrictive-endorsement.html
http://www.jordanschrader.com/articles/article0001.html
http://www.carreonandassociates.com/articles/4settle.htm

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I don't think it's legally binding at all. I've always considered it to be a note solely for the benefit of the person writing the check so they can look back at it later and remember what it was for.

There's an urban legend (linked below) that says one can supposedly reduce their debts by sending a check for less than the full amount owed (but marked "paid in full") to their creditors. The problem with this reasoning is that it presumes that the debtor can unilaterally declare they owe less, and that the creditor is agreeing to this by cashing the partial payment.

So no, your acceptance of a check labeled with something other than an accurate description of services provided does not obligate you to anything. Your invoices and other contracts should probably supersede anything written on a check.

*insert obligatory I'm-not-a-lawyer disclaimer here*
Source(s):
http://www.snopes.com/business/bank/paidfull.asp

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When ever I get a traffic ticket that is obviously a speed trap, I write in the memo box, "Road Tax." Maybe I could write this off on my taxes. I don't think so.
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When I have seen memo fields brought up in court, it was because no other paperwork existed documenting the purpose of the payment. For example, the defendant would say, "that money was a gift," to which the judge would retort, "but the memo says 'loan.'" In the cases you are mentioning, you already have legal documentation on what services are provided, which should outweigh memos. It would be a feeble defense to claim, "I didn't read the paperwork and wrote in what I thought the services were for." Bottom line, I don't think you have anything to worry about.
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@Robbrown

You would be surprised, some states up north the statement
"Paid in protest" or (PIP) (in parentheses) can actually become legally binding in court if the plaintiff can show some type of situation where they *could* have been put under pressure to write the check.
(Note that they don't have to actually prove it with evidence)

An appeal can then be filed in with the bank and can become reversed completely without any questions.

You should check your states local statutes, some states are different.

NewYork (where i worked for a short while) i know for sure it is binding to some degree.

Kind Regards,
XDS
Source(s):
My Brain.

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The memo is in fact, legally binding.

When someone deposits a check, that by endorsing the check, they are agreeing to whatever is written in the memo field -- and that this is legally
binding in court.

The most typical example of a memo line creating trouble in court regards the phrase "paid in full;" in a number of jurisdictions, if you cash this check, and the individual has not in fact, paid the full balance of what they owe you, you may be unable to claim the remainder of the balance. Other jurisdictions however, have specific legislation that allows an individual to cash "paid in full" memoed checks, and still maintain their right to pursue the remainder of the balance.
In some states, the memo line annotation can nullify an existing agreement.

This having been said, while the rendering or
depositing of a check may indeed become a means of establishing one's
participation in an agreement, in the presence of an invoice, contract, or otherwise more "court-worthy" document so to speak (as in your situation), the memo would not be especially relevant. A memo line is a sort a last-resort in terms of determining an agreement between two parties.

To the individual who writes "road tax" on the memo line of checks regarding speeding tickets, I would direct them to this case study where a slightly more profane version of the same endeavor caused someone to be charged with contempt of court:
http://www.clickorlando.com/news/9430721/detail.html

My final advice:
THE MOST RELEVANT THING TO DO would be to look up the Uniform Commercial Code for your state.
It will give you precise information about the validity of memo lines within the context of business transactions for your jurisdiction. My gut reaction is that in your instance, you should be fine. If you are concerned that one of your clients would take you to court, your safest bet is to return the check and make another payment arrangement.
Source(s):
http://www.bankingquestions.com/checksyouwrote/q_memoline.html

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Years ago I had this same question for myself; so I went to the bank manager for the bank I had my accounts. It was a Scotia Bank and we eventually contacted the head office in Toronto. What information I received from all points of inquirer was the same. The "memo" field of a check is for the sole use of the person writing the check and it is meant for simple detail as what the money is being spent for. It has no bearing on the actual product or any terms of agreement between the seller and the buyer.

Once I received this information I went to my lawyer and asked him the same question. What I got from him was there is definitely no legal binding at all to the memo field of a check.

What caused me to want to find out was the fact that a friend of mine would always write in goofy, lewd and sometimes obscene things in the memo field of his checks. He would laugh about it as he said it was something for the bank clerks to have a good laugh over. I said to him, what if there is some legal thing that can cause you to get into trouble about what you write in there? So then the search began and in the end it was quite interesting to hear all responses. In the end though it is simply to be an aid for book keeping for the account holder.

I guess it is one "service" a bank provides without a fee. Do not let them know that or they will begin to add a fee for any check that has the memo field with any data entered into it!
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Bank wise, it has hold no hold whatsoever about what can be done with a check.

Legal wise, the only thing the memo can prove is what the check was for if there is NO OTHER EVIDENCE AVAILABLE. The only time you see this is in the silly daytime court shows where people are arguing over whether or not the money given to them was a gift or a loan.

In which case, if loan is on the memo line, the judge will ask where the contract is. =p

If your case, if you have an itemized statement and records of which check goes with what bill, then you have absolutely nothing to worry about. Your evidence will carry more weight than what a crazy person scrawled on the check.
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Filling out the "Memo" field on a check is simply optional and the line can be left blank, or you can enter any information at all. Some checkwriters may note an account number or invoice number that is being paid with the check, others may just write the purpose of the check, such as "For Birthday" (or another note to remind them what the check was for). What is entered in the "Memo" field is legally binding in terms of the person endorsing the check agreeing that the payment is for exactly what was written in the "Memo" line.
However, this field is generally not read by the bank and does not change how the check is processed. Further any alteration of the "Memo" field has no impact on whether or not the check can be cashed.

Further information on how to write a check can be found in the tutorial in the attached link (What to put on a check).
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The computer programmer Militzer from Allen Park got the ticket May 29. When Militzer wrote the check to Berkley District Court, he scribbled on the memo line, "BULL (expletive) MONEY GRAB."

The District court found that memo statement was offensive and held Militzer in contempt of court. Militzer argued the statement was protected by freedom of information, but the defense failed.

The memo statement has bearing on the bill. The memo statement was connected with the payment to the court. Militzer said he thought the court was gaming him and he was protesting by writing his statement on the memo. The court did not provide any leniency.

What about mistakes on the check? Banks process the check. Customers receive a product or service for the fee. Suppose, a customer contends in court that the check was incorrectly given to you and further arguing that the check had a memo statement with the word "Websites", but your company has no record of a service under the category of "website". At the extreme, you can not prove that the service or product was delivered with the term website.

Your risk is minimal. Invoices and receipts can be matched with check amounts. The conclusion should be that the invoice and receipts match with the check amount.
Source(s):
http://symbii.com/stories.php?sid=363

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