My company developed a website for a client. The job was paid for as per a written contract stating that upon receiving our last payment and the client's approval for the work done, the website would be launched. We were paid in full and deposited the check into our bank, which cleared it in 24 hours. All was well. I noticed five weeks after the project was delivered, the final payment was removed from our account without any notice either from the bank, nor did we have any knowledge from the client regarding this action.
Can this be done? Is it legal? Can a cleared item then be recalled? It seems that the client backdated a stop order on the check. Who do I go to for assistance in this matter? Actually, the money was stolen from my account over a month after the product was delivered. This doesn't make any sense to me. Imagine if all our deposits were recalled after the products or services were used!
The key elements of your question are the date on which the check in question was presented for payment at the bank it was drawn on, and the date on which that bank returned it. That's because that bank only had one business day to send the check back; after midnight on the business day after the day it received the check for payment the bank became accountable for the amount of the check, and it would be too late to return it for stop payment or any other reason. If the check had already been paid and the midnight deadline passed by the time the client asked its bank to stop payment, the stop payment order was legally too late to be effective.
Your bank should assist you by making a late return claim on the check. The only valid defense to a late return claim is documentation that the return was timely and therefore the delay is not the other bank's responsibility. If your bank's claim is not successful, you can pursue your client in court for the balance owed on your contract.
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The key elements of your question are the date on which the check in question was presented for payment at the bank it was drawn on, and the date on which that bank returned it. That's because that bank only had one business day to send the check back; after midnight on the business day after the day it received the check for payment the bank became accountable for the amount of the check, and it would be too late to return it for stop payment or any other reason. If the check had already been paid and the midnight deadline passed by the time the client asked its bank to stop payment, the stop payment order was legally too late to be effective.