if a direct deposit was made into a business account, is the business liable to pay the entire amount back?

UPDATED: Nov 2, 2011

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if a direct deposit was made into a business account, is the business liable to pay the entire amount back?

Mistaken deposit made a year ago.

Asked on November 2, 2011 under Bankruptcy Law, Maryland


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If money was deposited into anyone's account--whether person, corporation, LLC, etc.--by mistake, then that person or entity must repay the entire amount. A mistake does not create an entitlement to property, or create a right to keep it. To use an analogy: if the wrong coat was given you at a restaurant coat check when you were leaving, that error would not entitle you to keep the coat and its contents; or if you accidentally wrote the wrong account number on your mortgage check, you would correctly expect the bank to apply the check to your mortgage, not someone else's, once that was pointed out. Similarly, if money is mistakenly deposited to a business, the business must repay it.

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