Earl issues a check drawn on First National Bank to Good Office Supply to pay for six filing cabinets. Later, Earl discovers defects in the goods and orders First National to stop payment on the check. Earl does not renew the order, and the bank clears the check eight months later. The bank
A) must recredit Earl's account and substitute acceptable goods.
B) must recredit Earl's account or substitute acceptable goods.
C) must substitute acceptable goods but not recredit Earl's account.
D) need not recredit Earl's account or substitute acceptable goods.

Question

Quizplus · Accepted Answer

The bank is not responsible for the defect in the goods that Earl received from Good Office Supply. Earl's decision to stop payment on the check does not relieve him of the obligation to pay for the goods that he received. The bank cleared the check eight months later, which means that it processed the payment as it was instructed to do so by Earl. Therefore, the bank does not need to recredit Earl's account or substitute acceptable goods.

Earl Issues a Check Drawn on First National Bank to Good