Asked by juan david jimenez vargas on May 22, 2024
Verified
If a drawee refuses to pay an unaccepted draft,the draft is dishonored,and the drawee becomes liable for refusing to pay it.
Drawee
The party directed by a drafter (e.g., the issuer of a check) to pay a certain sum of money to the party named in the document.
Dishonored
In relation to financial transactions, it refers to the refusal of payment on a check, note, or bill when presented.
- Comprehend the legal ramifications of dishonored drafts and the implications stemming from endorsements labeled "without recourse."
Verified Answer
TS
Tiphany santanderMay 22, 2024
Final Answer :
False
Explanation :
A drawee becomes liable on a draft only after accepting it. If a drawee refuses to pay an unaccepted draft, the draft is dishonored, but the drawee does not become liable for refusing to pay it; instead, the drawer or endorsers may become liable.
Learning Objectives
- Comprehend the legal ramifications of dishonored drafts and the implications stemming from endorsements labeled "without recourse."