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You buy a car from a friend. In exchange for the car, you give him a $5,000 check. He calls you the next day and says that he lost the check, and asks you to give him another check and stop payment on the one he lost. Thinking you are doing the right thing for your friend and protecting yourself, you issue the stop payment and give your friend a new check. A few weeks later, your absent-minded friend finds the first check, takes it to his bank, deposits it, then withdraws the $5,000 and moves to the Cayman Islands. The bank presents the first check to your bank for payment, and your bank instructs them that a stop payment was issued and rightfully refuses to pay the check. Your former friend's bank sues you to recover the $5,000 it paid to him. Does the bank have a case?

Operation Management, Management Studies

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