This method is sometimes suggested for the settlement of mortgages. While mortgages are a different/bigger amount and the adversary may or may not be more aggressive.. Banks…. the approach was recently.. this year, thrown out of court and the bank’s right to foreclose was upheld. In this instance a promissory note was used.
The approach is: the home owner sends either partial payment or a promissory note and states that acceptance is made either when the partial payment is deposited or the promissory note is not rejected /returned within 72 hours.
In the promissory note scenario, the process requires that the payer set a time and place where by the payee is required to tender the promissory note for honouring. The paperwork accompanying the promissory note states that Failure to make presentment at the alloted time and place is deemed to be acceptance that the obligation is now settled.
A court found that this type of paperwork does not constitute a legal agreement because it is one sided. The bank argued that the promissory note was not an agreed means of settlement as per the mortgage agreement and they did not have to accept it.
NOW. there may have been some arguments that the Payer did not argue “in the moment” in court that might have enabled them to hold their position. Not sure. what my point is, is that the assumption that a new term or condition to the relationship is formed by presentment of the cheque may not be 100% water tight.
It would be a good idea for people to keep on top of it. Check that there isn’t anything listed in the PPSR or any type of lien on the property. Councils will sometimes let the debt accrue and put a lien on the property and take their claim from the proceeds of any future sale. They may just go for a declaratory judgment and obtain an order to sell the property out from under you.