Fact Pattern 27-1A
Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair the car properly, issues a stop-payment order.
-Refer to Fact Pattern 27-1A. Capital Bank pays the check. Capital
A) can sue Echo for a wrongful stop-payment order.
B) can sue Fix-It for breach of contract.
C) can sue no one because it paid a check that was not properly payable.
D) is liable for Echo's loss due to the wrongful payment.

Question

Fact Pattern 27-1A 
Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair the car properly, issues a stop-payment order.
-Refer to Fact Pattern 27-1A. Capital Bank pays the check. Capital
A) can sue Echo for a wrongful stop-payment order.
B) can sue Fix-It for breach of contract.
C) can sue no one because it paid a check that was not properly payable.
D) is liable for Echo's loss due to the wrongful payment.

Quizplus · Accepted Answer

Capital Bank is liable for Echo's loss due to the wrongful payment. Once Echo issued a stop-payment order, Capital Bank had a duty to either refuse to pay the check or inform Fix-It of the stop-payment order. By paying the check anyway, Capital Bank breached its duty and is liable for Echo's loss.