ABC Corporation,a large corporation,calls Joe's Plumbing Service to do a large amount of plumbing work.Joe does the work but before he can collect the money,Jane,a disgruntled employee of ABC Corporation,goes to the bookkeeper at ABC Corporation and says that her company did the work and that she should be paid.She does not represent herself as an agent of Joe's but claimed that her own company was involved in doing the work.The bookkeeper gives Jane a check for the full amount.Jane leaves,cashes the check at Community Bank,and is never heard from again.Who is ultimately liable for this loss,assuming Jane cannot be found?

Question

Quizplus · Accepted Answer

ABC Corporation is liable for the loss because they paid the wrong party. Jane misrepresented herself and ABC Corporation did not properly verify who was entitled to the payment. Joe's Plumbing Service did the work and was entitled to the payment, so they are not liable. Community Bank may have been negligent in cashing the check, but they are not ultimately liable for the loss. The Federal Deposit Insurance Corporation and State Banking Commission are regulatory agencies and do not have liability in this scenario.

ABC Corporation,a Large Corporation,calls Joe's Plumbing Service to Do a Large