Asked by Zheng Shouyi on Jul 02, 2024
Verified
If an issuer forgets to write the date on a check, what is the effect?
A) The payee may write in the date consistent with the intent of the issuer, but must put a notation on the check to the effect that it was altered.
B) The payee may write in the date consistent with the intent of the issuer and may transfer the check to a holder in due course.
C) The payee may write in the date consistent with the intent of the issuer, but may not transfer the check to a holder in due course.
D) The check is no good, cannot be completed by anyone, and should be destroyed.
E) The check is good only if the payee can get in touch with the issuer and have the issuer fill in the appropriate date.
Holder In Due Course
A party who has acquired a negotiable instrument in good faith and for value, and thus has certain protections against defenses and claims.
Issuer
An entity that develops, registers, and sells securities for the purpose of financing its operations.
Date
A specific point in time, often defined by day, month, and year, which can be associated with events, deadlines, or appointments.
- Understand how changes and mistakes in negotiable instruments impact their legitimacy and transferability.
Verified Answer
AG
Archna Gandhi7 days ago
Final Answer :
B
Explanation :
The payee may write in the date consistent with the intent of the issuer and may transfer the check to a holder in due course. This is because the Uniform Commercial Code (UCC) allows for certain deficiencies in a negotiable instrument, like a check, to be corrected by the holder if the correction is made in good faith and in accordance with the original intent of the parties involved.
Learning Objectives
- Understand how changes and mistakes in negotiable instruments impact their legitimacy and transferability.