Asked by Billy Yeung on May 12, 2024
Verified
If the party that dishonors an instrument is a collection bank,when must the collecting bank give notice of the dishonor to a secondarily liable party?
A) Before midnight of the next banking day
B) Within 48 hours
C) Within 7 days
D) Within 10 days
E) Within 30 days
Collection Bank
A financial institution where checks or drafts are presented for payment.
Notice of Dishonor
A formal notification indicating that a negotiable instrument like a check or bill of exchange has been presented for payment and declined.
- Understanding the commandments and norms regulating negotiable instruments, focusing on their presentation, endorsement, and non-acceptance.
Verified Answer
AM
Aaron McFallMay 16, 2024
Final Answer :
A
Explanation :
Uniform Commercial Code Section 3-503(c)states that if the party that dishonors an instrument is a collection bank,it must give notice of the dishonor to a secondarily liable party before midnight of the next banking day.
Learning Objectives
- Understanding the commandments and norms regulating negotiable instruments, focusing on their presentation, endorsement, and non-acceptance.
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