Gage Advised His Bank to Stop Payment on a Cheque

question 48

Multiple Choice

Gage advised his bank to stop payment on a cheque that he had written in favour of Dennis Waters. Gage identified the cheque as written to Dennis Waters for $43, 250. The cheque was in fact written for $43, 025 and because of this the bank's computer system missed the cheque and the money was paid out to Dennis. Which of the following statements is TRUE?

• A)Gage can obtain punitive damages against the bank
• B)the bank is liable to reimburse Gage for the money paid out on the cheque.
• C)the bank is not liable as the bank's forms indicated it was not liable if the stop payment request was not completed accurately
• D)the bank is liable and must reimburse Gage for the money paid out on the cheque only if Dennis committed fraud in cashing it.
• E)The bank and Gage are each 50% liable for the error

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Definitions:

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