Asked by Sheree Rouse on May 10, 2024
Verified
Which of the following was the result on appeal in Heartland State Bank v. American Bank & Trust, the case in the text involving whether the defending payor bank timely sent notice of dishonor of a check when it sent notice before midnight on April 11 for a check received on April 10?
A) That the defending bank had no right to return the check because the check had already gone through the Federal Reserve System.
B) That the defending bank had no right to return the check because by accepting the check, it became accountable for it.
C) That the bank had no right to return the check because the check was written by one of its customers.
D) That the defending bank had until midnight on April 10 to return the check and that it, therefore, did not act in a timely manner.
E) That the defending bank had until midnight on April 11 to return the check and that it, therefore, acted in a timely manner in doing so.
Dishonor
The refusal or inability of an entity to fulfill a financial obligation, such as a check or bill.
- Grasp the importance of timely notice and the implications of failing to provide it in the context of negotiable instruments.
Verified Answer
KR
Kiara RiveraMay 11, 2024
Final Answer :
E
Explanation :
The correct answer is that the defending bank had until midnight on April 11 to return the check and acted in a timely manner by doing so. This is based on the Uniform Commercial Code's provision that a bank has until midnight of the next business day after the day of receipt to dishonor a check.
Learning Objectives
- Grasp the importance of timely notice and the implications of failing to provide it in the context of negotiable instruments.