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

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​

Quizplus · Accepted Answer

Once a check is cleared, the bank can assume that the customer's account has authorized the payment, and the bank can legitimately debit the customer's account. Since Shane did not renew the "stop payment" order, the bank acted within its rights to clear the check and does not need to recredit Shane's account. However, Shane may still have legal recourse against Farm Supply for the defect in the rototiller.

Shane Issues a Check Drawn on Thrifty Bank to Farm