1. Read the following scenario and answer the question in 5-10 sentences. Randy

Question

1. Read the following scenario and answer the question in 5-10 sentences. 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.

Explanation / Answer

This is a case in which the Nina paid the check to Randy who also endorsed the same and paid it to Christina in order to pay the repair bills. In this case as Christina is denied payment because of insufficient funds, Randy needs to be liable for the same because Christina has no contract with Nina. Randy in order to get his payment can hold Nina liable but Christina cannot hold Nina liable as she has not had any transaction with Christina directly. Randy needs to take care of both, that is to ensure that he gets his payment from Nina and also repays the same to Christina.

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