Is a bank liable to its drawers if it pays after effective stop payment order?

Question

Let's say: if I have ordered a tv set from a tv retailer store and drawn a check for my punchase,after I see another tv retailer store having the same tv set on sale,I call my bank to stop the payment to the store I have ordered a tv set from. If the bank mistakenly pay the store after the stop payment order, is the bank liable for its own mistake or I have to take some responsibilities for the event?

Let's say: if I have ordered a tv set from a tv retailer store and drawn a check for my punchase,after I see another tv retailer store having the same tv set on sale,I call my bank to stop the payment to the store I have ordered a tv set from. If the bank mistakenly pay the store after the stop payment order is effective, is the bank liable for its own mistake or I have to take some responsibilities for the event?

Answer 1

If there is a legitimate stop payment order on record dated before the payment to the drawer transpired, then the bank is liable and the payer has no obligation to the payee or bank for that money.

Answer 2

Stop payment orders are governed by the Uniform Commercial Code, see section 4-303 [When Items are Subject to Notice of Stop Payment], 4-403 [Customer's Right to Stop Payment], and also review section 4-401 [When a Bank May Charge a Customer's Account].

It looks like you may have your bank on the ropes.

Answer 3

Yes. If the bank mishandled the stop payment they will need to immediately credit you (and refund any charges sans the stop pay request chg) and request the funds be recovered via cash letter adjustment through the Federal Reserve. In short you need to be credited, but it is highly unlikely the bank will lose out either.

Answer 4

I think so