AmIliable for paying someone else’s bank charges ifI stopped payment on a checkto them?
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AmIliable for paying someone else’s bank charges ifI stopped payment on a checkto them?
I stopped payment on a check issued to an autobody shop for repairs as the workmanship was done unacceptably. I informed him within 12 hours that I was going to do this and paid him his “return check fee”and rescheduled the work to be re-done. The work is now complete but he wants to charge me for his bank charges for returned checks he has incurred based on the check I had given him and then stopped. Am I liable for this and, if so, am I able to ask to see his bank statement to prove the amount it legitimate (he could have written an unlimited amount of small checks).
Asked on July 5, 2011 under Business Law, Virginia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Are you liable? As a general matter, you are liable for another party's bank charges from a stopped or returned check, since it was your intentional or deliberagte action (stopping the check) which caused them to incur the loss.
However, you say that you paid him the return check fee. That fee should take care of any liability you may have in this regards--it is the payment made to the repairshop for the inconvenience and cost of a returned check. If the return check fee was less than his actual bank charges, a case *might* be made that you should pay the difference--though that's still less than certain; he set the return check fee after all, as payment for a returned check, and it's not your issue if he set it too low--but if the return check fee equals or exceeds his bank charges, it is difficult to see why you should have to pay the bank charges, too, thereby enriching him rather than simply making him whole.
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