Exam 34: Checks and Electronic Transfers

Jane wrote a check for $10. She wrote this check in a careless and negligent manner, making alteration easy. Ben altered this check to read $1,000. His alteration was crude and obvious to anyone paying attention. Ben cashed the check at Jane's bank. The bank was negligent in accepting this check, but it deducted $1,000 from Jane's account. Jane sued the bank, and the jury determined that Jane's negligence contributes 50 percent to the loss and the bank's negligence contributes 50 percent. How much is Jane entitled to recover from her bank?

In case of honoring checks, a bank:

Hailey wrote a check for Marsha, her landlady, on July 7 and dated it for August 1. Hailey notified her bank to not honor the check before August 1. However, the bank honored the check when Marsha presented it on July 29. Due to insufficient funds, the bank turned down the check and charged $50 to Hailey's account. Marsha terminated Hailey's rental contract for writing her a bad check. Which of the following is true of this situation?

Checks and other drafts collected through the banking system usually have all of the following EXCEPT:

Shawn purchases a computer from Adelaide Electronics, and writes them a check of $1,000. However, after Shawn brought the computer home, it abruptly stopped working due to a virus attack. Shawn calls his bank ordering a stop-payment on the check. Adelaide Electronics gave the check to Jack Enterprises, their creditor. Shawn's bank honored the check when Jack presented it. Which of the following is true in this case?

A drawer whose bank paid checks over a stop-payment order may not be entitled to have his account recredited, if he is unable to show he suffered any loss.

Certified checks must be made available by:

A drawer can claim alteration as a reason for not charging a particular check to his account, even if the drawer has contributed to the alteration in some way.

A bank is not authorized to pay a postdated check before the date on the check and charge the amount to the customer's account, unless the customer has given notice to the bank.

Sal brings a stale check to his bank on June 1, 2003. The check is dated September 1, 2002. The bank:

Due to Susan Sharp's many fraudulent misstatements, Nelly Nice buys Susan's car. Nelly writes Susan a check for $5,000 in payment. Susan immediately negotiates the check to Patty Proper, who qualifies as a holder in due course. In the meantime, Nelly discovers that the car is junk and makes a timely and proper stop-payment order to her bank. However, when Patty presents the check for payment, the bank pays it anyway. Is the bank required to recredit Nelly's account?

Which of the following is true of the drawer-drawee relationship?

Adams wrote a check to Jimmy for $5,000. After three days, he met with an accident and died. Now Jimmy wants to collect money from the bank and so he deposited the check. However, the bank is refusing to pay. Is he entitled to get his money?

Edith purchases what is represented to be a new DVD player from Big Al's Electronic Emporium, by giving Al a check for $200 drawn on Big Bank. Edith then discovers that the DVD player is a used model and calls Big Bank to place a stop-payment order on the check. Big Al negotiates the check to John who qualifies as a holder in due course. John presents the check to Big Bank the next day, and Big Bank pays the check. Which of the following statements is most accurate?

Which of the following is an EXCEPTION to the mandatory availability schedules of the Expedited Funds Availability Act?

Which of the following is true in case of death or incompetence of a customer?

Checks that are more than six months old are called:

If a customer does not discover a forged check and report it to the bank within one year from the time of the statement containing the check, the bank is not obligated to recredit his account for the amount of the forged check.

A teller's check is a check on which a bank is both the drawer and the drawee.

In case a check is altered so skillfully that a bank is unable to detect the alteration, which of the following stands true?