Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

Exercise 29

Donna gives Peter a check for $3,000 in return for a desktop computer. The check is dated December 2. Peter transfers the check for value to Howard on December 14, and Howard deposits it in his bank on December 20. In the meantime, Donna has discovered that the computer is not what was promised and has stopped payment on the check. If Peter and Howard disappear, may the bank recover from Donna notwithstanding her defense of failure of consideration? What will be the bank's cause of action?