Asked by Abigail Kooiker on Jul 21, 2024
Verified
Chin wants to buy a small parcel of land.The seller requires a certified check as payment.Chin has a checking account with ABC bank;he prepares a check for the seller and then has the bank certify it.He then presents the check to the seller.Who may now be liable for payment of the amount of the check?
A) Chin only
B) ABC bank only
C) Both Chin and ABC bank
D) Neither Chin nor the ABC bank
Certified Check
A personal check for which the issuing bank guarantees payment by certifying that sufficient funds are available and set aside.
Liable
Legally responsible or obligated, often in the context of owing compensation for harm or damages caused.
- Understand the implications of certification of checks and the shifted liabilities.
Verified Answer
?T
?? Th? Kim AnhJul 27, 2024
Final Answer :
B
Explanation :
If the drawee bank certifies the check,it becomes primarily,or absolutely,liable for paying the check as it reads at the time of its acceptance,and its acceptance discharges the drawer and indorsers who indorsed before the acceptance.
Learning Objectives
- Understand the implications of certification of checks and the shifted liabilities.