I am an independent businessperson and provide a service to local companies. I have just completed a large project and received payment via check. I recently received a call from the owner of the company complaining about the cost that he was charged, and now I'm afraid that he is going to place a stop payment on the check. What are my rights and what are his?
If you cash the check before a stop payment is in place, nothing happens with the bank. You could be sued by the company under some pretense based on the services provided or the cost.
If you try to cash the check and find a stop is in place, you may have a cause of action under a "theft by check" law in your area. A call to your district attorney could provide more information on this. At the very least you could sue them.
In any case, based on your beliefs, do not spend any of the money until you know you have the funds. If you deposit it in your bank, it will take longer to clear than if you cash it at the bank on which it is drawn. If you deposit it and it is returned "stop payment", your bank will reverse the deposit and you may incur a fee for this.
BankingQuestions.com is a free service made possible by the generous support of our advertisers. Advertisers are not responsible for site content. Please help us keep BankingQuestions.com FREE by supporting our advertisers. When you see an ad for a product or service you may have an interest in, click through to learn more.
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
If you cash the check before a stop payment is in place, nothing happens with the bank. You could be sued by the company under some pretense based on the services provided or the cost. 