Question

Randy Rouser completes landscaping work on Nina Tothill’s yard, and Nina writes a $1,750 check from her account at Small Bank. The check is written as payable to Randy Rouser. Randy needs to pay house repair bills, so he indorses the check and delivers it to Christina Caliss, a professional plumber, for value received. Christina in turn deposits the check in her account at Large Bank. Large Bank quickly returns the check to Christina with a mark stating that the check has insufficient funds. Christina wants to know whether Randy or Nina can be held liable for the check. Advise Christina on what she needs to know in order to answer that question.

Answer 1

Answer: Christina can hold Randy liable for the check

Explanation:

In this scenario it is important to note 2 things.

1. Nina PAID Randy.

2. Randy PAID Christina.

The point is that Randy is the one who had a contract with Nina. Even though Nina is the one who's check was not honored, Christina has NO CONTRACT with Nina. This means she cannot hold her liable.

As far as Christina is concerned, the check came from Randy and so she should hold him liable.

Randy on his part can then go back to Nina and hold her liable because he is the one who had a contract with her.

If you need any clarification do comment.