Question

Bok buys an espresso machine from Coffee Gadgets, which bills him for $100. He writes out a check drawn on Dios Bank, but later, believing that the machine is defective, issues a stop-payment order. Dios

a. is liable to Coffee Gadgets for the amount of the check.
b. need not follow Bok’s order because it was issued after the check.
c. need not follow Bok’s order unless the check was certified.
d. must stop payment if the bank has a reasonable time to act.

Answer 1

Diosa Bank must honor Bok's stop-payment order on the check for the espresso machine if given reasonable time to do so. Timeliness and proper notification are crucial for the stop-payment order's effectiveness.

Step-by-step explanation:

The subject question involves a scenario where Bok buys an espresso machine, issues a check, then halts payment believing the item is defective. The correct answer is that the bank, Diosa Bank, must stop payment if it has reasonable time to act upon Bok's stop-payment order. The law generally provides the right for a check writer to issue stop-payment orders, and as long as the check has not yet been processed by the bank, the bank is typically obliged to follow the customer's instructions, especially if the customer believes the transaction associated with the check involves a defective product.

However, the effectiveness of a stop-payment order can depend on various factors, such as whether the check has been certified or whether the bank had enough time to respond to the stop-payment action before processing the check. For Bok's issue with the espresso machine, it would be important for him to issue the stop-payment order in a timely manner and confirm that the bank acknowledges the order.