Exam 24: Banking in the Digital Age

Franco buys a sofa from Grey at a garage sale. Franco writes Grey a check for $50 to pay for the couch. Grey is

With a joint checking account, the bank can hold any joint-account owner liable for payment of an overdraft even if that owner did not sign the check or benefit from its proceeds.

A customer's negligence cannot shift the loss when payment is made on a check with an altered amount.

Quito writes a check to Roy on Quito's account at Sterling Bank. The bank dishonors the check because Quito has insufficient funds in his account. The bank is liable to

To avoid liability for negligence, a customer must examine monthly bank statements and canceled checks promptly and with reasonable care, and report any forged signatures to the bank.

Because checks serve as a substitute for cash, they can facilitate financial record keeping.

Ruth takes her car to Service Center, which repairs the car and bills her for $500. She writes out a check drawn on Tempo Bank, but later, believing that Service Center did not fix the car properly, issues a stop-payment order. If Tempo pays the check, the bank

When a bank draws a check on itself, the check is a negotiable instrument at the moment it is issued.

If only a bank's drive-through facility is open, a check deposited on Saturday will not trigger the bank's midnight deadline until the following Monday.

Corky pays Debit Bank $500 plus a service fee to draw a check on itself payable to Electric Company. The party responsible for paying the check is

Checks received after a certain time can be deferred for posting until the next banking day.

When a customer makes a deposit into a checking account, the customer becomes a debtor, and the bank a creditor, for the amount deposited.

Maya uses e-money consisting of funds stored on microchips in her laptop, phone, and tablet to pay bills. This effectively replaces physical cash with virtual cash in the form of

Fewer records are available with electronic banking to prove or disprove that a transaction occurred.

Ally writes a check to Beri on Ally's account at Community Bank. The bank dishonors the check even though Ally has sufficient funds in her account. The bank is liable to

Electronic banking has reduced the number of possibilities for tampering with a person's private banking information.

If any financial institution, such as a brokerage house, handles a check for payment or collection, the check is covered by UCC Article 4.

Brady forges Cal's signature on a check "payable to the order of Brady" drawn on Cal's account in Downtown Bank. Cal's forged signature is

A bank is not obligated to pay an uncertified check presented for payment more than six months from its date.

If a bank's payment over a stop-payment order causes subsequent checks written on the drawer's account to be returned for insufficient funds, the bank will be liable for the drawer's resulting costs.