A family member had signed an agreement and I made the payment by check. Immediately after, the family member requested for a cancellation of the agreement by phone and the other party agreed to the request. I called my bank and put a stop payment to it, and requested for the canceled check back from the other party. The other party claimed he had deposited the check. I offered to pay for overdraft fee as well as to pay for any partial work he did. He later responded that there is not need for that since he claimed he had already cashed out the check. I spoke with my bank and saw that the check has not been cashed. I was afraid he hasn't cashed out the check and was just keeping the check so that he try again in 6 months when the stop payment expires. I was advised to close my account and so I did. Now I don't know if I will be haunted by this later on since the money is still in my account but he claimed he had already cashed out the check. Any input would be greatly appreciated!

You need to get the cancellation of the contract and his agreement in writing. Your bank should also be able to tell you if the check was presented but rejected.

1. if you closed you account there is no more money in it, closed means you took all the money out and that account was closed.

2. a check can not be used against another account with different account numbers.

3. the other person can sue you for a bad check , and depending on the size press charges in court for writing a check on a closed account.

You need to get in writing, that the contract has been cancelled and that the other party has not cashed the check and it has been destroyed.

And yes, if he ever presented the check for payment, your bank would know this.

I think getting him to sign a breach of contract will be a difficult thing now since he and my family member had already encountered a nasty, verbal disagreement. All I did was offer to help and now I'm in the middle of this. I did not even sign any agreement/contract beside the check.

The check was written before closing the account so I don't think it was intentionally a bad check.

Actually just the opposite. Closing the account AFTER you issued the check is a problem. However, if you have documentation that you stopped the check and closed the account before it was presented, you should be OK if you are sued or charges are pressed.

I would be better to have some proof that the 3rd party agreed to terminate the contract.

Or of course if they won't return the check, and they will not cancell the agreement in writing, you can see about forcing them to go ahead with the agreement. If they do't want to, then they will have to stop it in writing.

I stopped the payment, got a confirmation number. Request for the check but he refused to give back. I closed the account to have a peace of mind as was advised by the bank.

Thanks for all the responses so far.