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  1. #1
    Join Date
    Sep 2016
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    Default Can You Sue Somebody Who Stops Payment on a Check

    After an agreement to purchase a business, the buyer issued the seller five post-dated checks, each in the amount of $20,000, for the purchase price. They also have a contract for the sale of the business.

    The seller deposited the first check on the agreed date. The next day the seller found out that the check did not clear, and that the reason that the check did not clear was that the buyer stopped payment.

    Can the seller now sue the buyer for the face value of the check?

  2. #2
    Join Date
    Sep 2005
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    Default Re: Can You Sue Somebody Who Stops Payment on a Check

    It seems reasonable to infer that the payment was due under the terms of the contract for the sale of the business, in which case the seller can sue for the missed payment. The seller should check with the issuing bank to see if stop payments were issued on the other checks as well -- there's a good chance that they were and, if so, the seller should sue for the full selling price. Even if not, the seller could consider bringing a case for the full selling price on the theory of anticipatory breach, arguing that the buyer's act in stopping payment reflects that he has no intention of paying as agreed in the contract.

    Given the amount of money involved, it makes sense for the seller to work with a lawyer.

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