Legal Question in Credit and Debt Law in Indiana

Lost check liability

We have a customer who mailed in a check in settlement of their account balance with our company. The check was included as part of our daily deposit. However, our bank lost the check and our bank account was charged back.

We have requested the customer to replace the lost check and they are unwilling to do so. The check has never cleared their bank according to them. As a result we remain unpaid for the product provided to the customer.

Question is who has liability here? Can we pursue further legal proceedings against the customer? What is the bank's liability?


Asked on 5/20/04, 10:28 am

1 Answer from Attorneys
Cary Statfield Law Office of Cary N. Statfield

Re: Lost check liability

If the check never cleared your customer�s bank, then your customer would remain responsible for payment. However, if your bank lost the customer�s check, then it should pay the cost of your customer to place a stop payment on the lost check that the customer�s bank would charge, for your customer to stop payment on the lost check and write a new check. Not knowing the amounts in question may also change my answer. If you need additional information, you may contact us.

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Answered on 5/20/04, 11:40 am


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