Question

Hudson contracted with Ripley to install solar panels on her boat. The installation went well, seemingly. Unfortunately, two days after the installation the panels stopped working. Ripley claimed that the problem was Hudson's fault, and demanded that he make the system work; Hudson denied responsibility. Ripley had paid Hudson by properly executed check, and Hudson still had not deposited the check at the time of Ripley's demand. The day after receiving the demand, Hudson negotiated the apparently-regular, unaltered check to Bishop. Hudson suspected that Ripley's claim was valid and was glad to have negotiated the check before Ripley dishonored it. Bishop sought payment from Ripley for the check. Ripley refused to pay. Bishop sues at a time within the applicable statute of limitations. In what two circumstances will Ripley win?

Answer 1

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Answer:

It is possible for Ripley to win this case under the following scenarios.

Hudson had negotiated the check to Bishop with the full knowledge and information on the existing claim by Ripley that the solar panels installed on her boat by him had not been in working condition that could have been due to a fault at his end – there in he had not fulfilled his part of the contractual obligation for being entitled to the payment for installation.

As per the regulations of National Check Fraud Center, the payee - Bishop in this case can only sue the drawee Riley if the underlying obligation for which the check is given is extinguished. Since Hudson had failed to fulfill his part of his contactual obligation for receiving the check from Ripley, Bishop cannot sue Ripley for dishonoring the check.