Asked by Elisa Davis on Apr 24, 2024
Verified
An instrument is dishonored when a party refuses to pay the instrument, such as when a bank refuses to pay because insufficient funds exist.
Instrument Dishonored
A legal term for when a negotiable instrument (like a check or promissory note) is not honored or paid upon presentation.
Insufficient Funds
A situation where an account does not have enough money to cover transactions, leading to declined payments or penalties.
- Understand the implications of dishonor and the conditions under which an instrument becomes overdue.
Verified Answer
TR
Taryn Ramsey6 days ago
Final Answer :
True
Explanation :
An instrument is considered dishonored when it is presented for payment but the payment is refused or cannot be obtained, such as in cases where there are insufficient funds in the account on which the instrument is drawn.
Learning Objectives
- Understand the implications of dishonor and the conditions under which an instrument becomes overdue.