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Simple English definitions for legal terms
stop-payment order
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A quick definition of stop-payment order:
A stop-payment order is when a bank customer tells their bank not to cash a check they wrote. This can happen if the check is lost or stolen, or if the customer changes their mind about paying someone. It's like hitting a pause button on the check so it can't be cashed until the customer says it's okay.
A more thorough explanation:
A stop-payment order is an instruction given by a bank customer to their bank to not honor a specific check. This means that if the check is presented for payment, the bank will not pay it.
For example, if a customer writes a check to a vendor for a service, but then decides to cancel the service, they can issue a stop-payment order to their bank to prevent the vendor from cashing the check.
Another example is if a customer loses their checkbook or suspects that someone has stolen it, they can issue a stop-payment order for all the checks in the checkbook to prevent any unauthorized transactions.
Stop-payment orders are useful in situations where a customer needs to prevent a specific check from being cashed or prevent unauthorized transactions.