CCM8720 - Closing the Examination: Payment on account of an expected contract settlement

The claimant may want to make a payment on account of a settlement and this is often done because interest will be charged or they have some spare funds. Such payments are voluntary and are made without any legal obligation so they must be repaid again if the claimant asks for the money to be returned.

If you receive a spontaneous payment and it is accompanied by a letter saying:

• it is in full settlement or full and final settlement of your enquiry or
• it is accompanied by an offer for a substandard amount or
• it is accompanied by an offer which you will not be able to accept locally

you must immediately write to the claimant and say that the payment has been accepted as a payment on account only and that acceptance of the payment does not imply agreement to settle on their terms, or acceptance of any offer that has been made. If we cashed the cheque without such a disclaimer we might not be able to pursue recovery of the correct amount.

When you eventually come to fill in your 94A this will need to show the payments on account which have already been made.

If you receive a cheque – see CCM8722.

If the claimant wants to make a cash payment – see CCM8725.