Deck 24: C: The Function Creation of Negotiable Instruments

Question 1

National Bank's policy is to examine signatures only on checks exceeding $2,500.Checks for lesser amounts are selected randomly for signature verification.National fails to verify a forged drawer's signature on a check for $1,500 drawn on Odel's account.Most likely liable for the amount is

A)National Bank for a failing to exercise due care.
B)National Bank's other customers to whom the loss can be "spread."
C)Odel on the ground that she was a fictitious drawer.
D)the specific National employee who did not verify the signature.

Answer 1

A

Question 2

Dustin loans Concepcion $50.Concepcion can aid sustainability by

A)sending a paper check in payment.
B)sending payment to Dustin's e-mail address or cell phone number.
C)spreading payment over several installments.
D)loaning the $50 to Blair.

Answer 2

B

Question 3

In accord with banking industry practices,US Bank's computers are pro?grammed to verify signatures only on checks exceeding $1,000.US Bank cashes a check for $900 on the forged signature of its customer Vita.Under UCC Article 3,with respect to reasonable commercial standards,US Bank is

A)definitely liable.
B)definitely not liable.
C)liable if any other bank verifies all signatures on all checks.
D)liable if Vita has never written or cashed a check for more than $899.

Answer 3

B

Question 4

Phoebe sends Rosinda a cashier's check for $1,000.Rosinda deposits the check into her account at Security Bank.The next business day,the bank confirms a $1,000 increase in Rosinda's account.She then wires Phoebe $150 for "fees." Later,the bank discovers that the check is a fake.Most likely,the loss falls to

A)Rosinda.
B)Security Bank.
C)Rosinda and Security Bank in equal measure.
D)no one.