Asked by Caitlin Gamble on Jul 21, 2024
Verified
Shawn purchases a computer from Adelaide Electronics,and writes them a check of $1,000.However,after Shawn brought the computer home,it abruptly stopped working due to a virus attack.Shawn calls his bank ordering it to stop payment on the check.Adelaide Electronics gave the check to Jack Enterprises,their creditor.Shawn's bank honored the check when Jack presented it.Which of the following is true in this case?
A) The bank is liable to recredit Shawn's account,since the bank did not follow Shawn's instructions.
B) Shawn will be able to show that he sustained losses since the bank honored the check to Jack.
C) The bank is not liable to recredit Shawn's account,since Shawn did not send the stop-payment order well in advance.
D) Shawn cannot have his account recredited because he will not be able to show that he sustained any loss.
Stop Payment
An instruction given to a bank by an account holder not to pay a check or payment that has been issued but not yet cashed.
Virus Attack
Unauthorized manipulation or infiltration of computer systems by malicious software designed to cause damage or theft of data.
Recredit
The act of restoring credit or funds back to a consumer's account, often used in banking and financial services.
- Understand the prerequisites and timelines relevant to initiating stop-payment requests.
- Elucidate the ramifications resulting from a bank's neglect or incapacity to fulfill its obligations, encompassing monetary recompenses.
Verified Answer
DK
Daisy KarekeziJul 24, 2024
Final Answer :
D
Explanation :
To show a loss,the drawer must establish that the drawee bank paid a person against whom the drawer had a valid defense to payment.However,if the check is presented by Jack,Shawn cannot establish that he has suffered a loss.The only recourse for Shawn would be to pursue Adelaide Electronics on his misrepresentation claim.
Learning Objectives
- Understand the prerequisites and timelines relevant to initiating stop-payment requests.
- Elucidate the ramifications resulting from a bank's neglect or incapacity to fulfill its obligations, encompassing monetary recompenses.