Question
John wants to buy a washing machine from Anna that she is selling. Worried that the washing machine might get sold to someone else, John
John wants to buy a washing machine from Anna that she is selling.
Worried that the washing machine might get sold to someone else, John writes a check to Anna
for payment for the washing machine but John postdates the check for
"July 15, 2018" and he asks Anna to not deposit the check until July 15, 2018. Anna puts the check with some other deposits and forgets to hold the check, but instead
she deposits the check at First Residents Bank on June 28, 2018.
First Residents Bank is also John's bank and although he does not have the money in the account to pay the check at that time, the bank pays the item anyway
a.Was the bank within its rights to pay the postdated check?
b.Was the bank within its rights to honor the check even though there were insufficient funds in the account?
c.What other options did the bank have in this situation?
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