Fact Pattern 28-1
Kelly takes her car to Auto Repair Service, which repairs the car and bills Kelly for $500. She writes out a check drawn on Choice Bank, but later, believing that Auto Repair did not fix the car properly, issues a stop-payment order.
-Refer to Fact Pattern 28-1. If Choice pays the check, the bank

Question

Fact Pattern 28-1
Kelly takes her car to Auto Repair Service, which repairs the car and bills Kelly for $500. She writes out a check drawn on Choice Bank, but later, believing that Auto Repair did not fix the car properly, issues a stop-payment order.
-Refer to Fact Pattern 28-1. ​If Choice pays the check, the bank

Quizplus · Accepted Answer

If Choice pays the check despite Kelly's stop-payment order, the bank would be liable for Kelly's loss due to the wrongful payment. However, if the stop-payment order was properly placed, Kelly would not be liable for a wrongful stop-payment order. The bank may have to pursue legal action against Kelly to recover the funds, but it cannot sue Auto Repair for breach of contract as the bank is not party to the contract between Kelly and Auto Repair.

Fact Pattern 28-1 Kelly Takes Her Car to Auto Repair Service, Which Repairs