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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41221
Experience:  Run my own successful business/contract law practice.
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Sometimes in business there are hiccups and burps. Sometimes,

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Sometimes in business there are hiccups and burps. Sometimes, downright heartburn.

Assume after contracting for then accepting the work/goods, a client pays in full the agreed upon price by issuing a check. Next, the purchaser asks the business person to hold the check for a period of time, then cash it. The business person agrees to these new terms to their original agreement. After the agreed upon holding period is satisfied, the business person deposits the check.

A few days later, the business person's bank informs them the issuer has placed a STOP PAYMENT on the check. When the business person contacts their client, the client claims there was a problem with half of the order. However, the client had lost the business person's telephone number and was unable to notify them there had been a problem (although this seems disingenous since the business has a website with the telephone number). Regardless, although the client claimed a 'few modifications' had to be made, all of the goods served their intended purpose and were used.

The next turn is laughably predictable: the client now claims they no longer have the funds to pay for the order. They can't pay for the half of the order they were satisfied with; and, they don't know when they'll be able to figure out how much they're willing to pay for the disputed portion of the order.

At this point, the business person has expended funds for time and materials and now realize they are most likely dealing with deadbeats. How might the business person proceed in this predicament?

Thank you for your post. Please permit me to assist you with your concerns.

Unfortunately dealing with potential deadbeats is all too common. What this comes down to is a potential claim to the client that if they do not pay in full by a certain date, the seller will file suit against them either in small claims court (if the amount is under $10,000 and the client is located in California), or district court for losses, and in higher court, also for attorney fees as well. The client then either has to pay, or defend the suit, or at worst file bankruptcy to avoid collections. Furthermore knowingly giving a bad check is check fraud and something that the business can follow up with the DA's office and press charges against the individual.

Good luck.

Customer: replied 4 years ago.

I contacted the Kern County, California D.A.'s office, but they stated STOP PAYMENT disputes are not addressed by their office.


Is small claims the only recourse?

Thank you for your follow-up, Michale.

In that case i am afraid that it is. It may potentially also be an FBI matter if the check crossed state lines--that may create a claim that this would be a federal violation. But ultimately this is a small claims matter.

Good luck.

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