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Home >> Checks/Money Orders >> Checks You Wrote
Bank Comes After Me for Stop Payment
I wrote a check to a contractor, who used it to pay the supplier. The supplier put it in the bank. I put a stop pament on the check and now the bank is trying to come after me for the money that they gave the supplier. Do they have rights to come after me? What should I do?
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 Under the Uniform Commercial Code, you remain liable on the check to everyone that held it, except for the payee. Your liability to the payee is based on the contract. Any one of those parties -- the supplier, the supplier's bank, or any bank that held the check between the supplier's bank and your bank -- has a claim against you if it is out money because of the stop. In this case, the supplier's bank is left holding the bag on the check, and it wants to recover from you.
Your contractor got his money and the supplier apparently got credit for the check and didn't get charged for the stopped check, or it would be the supplier coming after you, but you haven't paid for the work, except for the stop payment fee. You have no leverage with the contractor, unless he breached your contract. Pay the bank for the check, make sure you get the check back from them, and then decide if you have a breach of contract claim against your contractor.
Published on BankingQuestions.com 3/23/09
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