Asked by
April Perkins
on Dec 06, 2024
Verified
Omar receives a check from Trudy drawn on Shelfari Bank.Shelfari Bank improperly dishonors the check when Omar attempts to cash it.Which of the following is true of this case?
A) Omar is the holder of the check,and hence,has recourse against Trudy,the drawer.
B) Shelfari Bank,the drawee bank,is liable to Omar,the holder,for improperly dishonoring the check.
C) Omar has recourse against both the parties-the drawer,Trudy,and the drawee bank,Shelfari Bank.
D) Omar has recourse against Shelfari Bank,in case Trudy does not reimburse Omar.
Improperly Dishonors
Refers to the situation where a financial institution wrongfully refuses to accept a valid check or draft presented for payment.
Drawer
In banking, the person who writes or creates a check or draft instructing the bank to pay the stated amount to a third party.
Recourse
The legal right to demand a penalty, compensation, or satisfaction for a harm or loss.
- Discern the roles and responsibilities of the payer, drawee, and depositary during check transactions.
- Explain the responsibilities of banks in honoring or dishonoring checks, including postdated checks and checks drawn on a deceased person’s account.
Verified Answer
TG
Learning Objectives
- Discern the roles and responsibilities of the payer, drawee, and depositary during check transactions.
- Explain the responsibilities of banks in honoring or dishonoring checks, including postdated checks and checks drawn on a deceased person’s account.