Shane issues a check drawn on Thrifty Bank to Farm Supply Store to pay for a rototiller. Later, Shane discovers a defect in the device and orders Thrifty to stop payment on the check. Shane does not renew the order, and the bank clears the check eight months later. The bank
A) must recredit Shane's account.
B) must obtain funds from Farm Supply to cover the check.
C) must substitute acceptable goods.
D) need not recredit Shane's account.

Question

Shane issues a check drawn on Thrifty Bank to Farm Supply Store to pay for a rototiller. Later, Shane discovers a defect in the device and orders Thrifty to stop payment on the check. Shane does not renew the order, and the bank clears the check eight months later. The bank​
A) ​must recredit Shane's account.
B) ​must obtain funds from Farm Supply to cover the check.
C) ​must substitute acceptable goods.
D) ​need not recredit Shane's account.

Quizplus · Accepted Answer

The bank is not obligated to recredit Shane's account since he did not renew the stop payment order, and the bank cleared the check when presented for payment. The responsibility to resolve the issue with the defective device and payment for it lies with Shane and Farm Supply Store.

Shane Issues a Check Drawn on Thrifty Bank to Farm