Asked by Susan Nguyen on Jun 26, 2024
Verified
Baer writes a check for $500 "payable to Cary" drawn on Baer's account at Debit Bank. Cary indorses and sells the check to Esau, who deposits the check in his account at Fidelity Bank. Fidelity dishonors the check. Baer or Cary may be liable for payment of the check if
A) the drawer of the check does not repudiate the dishonor.
B) timely notice of dishonor is given.
C) more than thirty days have elapsed since the check was written.
D) the check was not properly presented for payment.
Timely Notice
Prompt notification within a designated or reasonable period, often required by law or agreement to uphold rights or fulfill obligations.
Dishonor
The state of being in disgrace or disrepute, often relating to a failure to fulfill an obligation, especially a financial one.
- Determine the culpability of entities involved in the production, exchange, and non-payment of negotiable instruments.
- Gain insight into the prerequisites for introducing and applying negotiable instruments.
Verified Answer
IT
Ismael TorresJul 01, 2024
Final Answer :
B
Explanation :
Timely notice of dishonor is crucial for holding the indorser (Cary) or the drawer (Baer) liable. If Fidelity Bank properly notifies Cary or Baer about the dishonor in a timely manner, either could be held responsible for the payment.
Learning Objectives
- Determine the culpability of entities involved in the production, exchange, and non-payment of negotiable instruments.
- Gain insight into the prerequisites for introducing and applying negotiable instruments.
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