Question

Katy’s Catering Co. places an order with Sharpe’s Supply House for 100 white linen tablecloths. A week later, Sharpe’s delivers the order to Katy’s in ten boxes. Katy opens up a few boxes, determines that they contain white linen tablecloths, and hands over a check for $1,000 to Sharpe’s deliveryman. Sharpe’s Supply then properly negotiates Katy’s check to its wholesaler, Harper Linens, as payment on Sharpe’s account. The next day, Katy opens up the remaining boxes and discovers that about a third of the order is messed up. Some of the tablecloths are blue instead of white, and some are polyester instead of linen. She immediately calls her bank and places a stop-payment order on the check. The next day, Harper’s deposited Katy’s check for payment, but of course payment was refused because of the stop-payment order. Harper’s then files a lawsuit against Katy’s Catering seeking to collect on the check.

Will Harper’s prevail in its lawsuit against Katy’s? Why or why not? Be sure to describe & define Harper Linen's legal status.

Answer 1

Answer:-

Katy's catering co. has the privilege to stop installment without bringing about punishments. This is on the grounds that, according to law, a check's installment can be halted if the indebted person has a decent confidence disagreement about the total of cash being paid.

Here, Katy's catering co. has a sensible conviction of its legal qualification to retain installment.

Katy's had requested 100 white material table garments and the check was drawn as a sum payable for this. Be that as it may, it got around 33 blue or polyster table garments. Henceforth it has the great confidence question and Katy can't be punished for halting the installment of the check.

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