Reference no: EM132468100

1. In exchange for a new roof, Paul gave Buck a Promissory Note, promising to pay to Buck's order $8,000.00, in six months at 10% interest. Paul failed to make payment on the maturity date and Buck filed a lawsuit. Paul used Failure of Consideration as the defense, saying that the roofing job was done in a poor and improper manner. The court held that Buck was the Holder in Due Course of the Promissory Note because he had taken the instrument for value, in good faith, without notice of any claims or defenses of Paul's. Is it proper that Paul use the defense of Failure of Consideration against Buck? Why or why not?

2. Kitchen Corporation sent a check to Overseas Equipment Company for payment of equipment ordered. When the check was reported as being lost, Kitchen Corporation wrote to its bank asking it to stop payment on the check. Kitchen Corporation then sent the money to the equipment company by wire transfer, which was received. However, 13 months later, the original check emerged and Kitchen Corporation's bank paid it, deducting the funds from Kitchen Corporation's checking account. Did Kitchen Corporation's check violate its duty to stop payment on the check? Please explain your answer.