Exam 27: Checks and Banking in the Digital Age

Kareem writes a check for $1,000 drawn on Liberty Bank and presents it to Maris. Maris presents the check for payment to Liberty Bank, which dishonors it. The party most likely liable to Maris is

Elmer can write checks on his account at Finance City Bank. Gina steals the checks, forges Elmer's signature, and cashes the checks at Finance City. The bank is excused from any liability if, after receipt of the first forged check, Elmer fails to report the forgeries within

eBank, an online financial institution, gives financial information about Frieda and other customers to a federal agency. eBank may be in violation of federal law

Johnny writes a check to Katie as payment for a 3D DVD player but soon discovers the player is broken. He goes to the drawee bank and orally authorizes Sissy, a bank officer, to stop payment on the check. This order is valid for

Darwin signs a check "pay to the order of Eva Marie" drawn on Darwin's account in First Funds Bank and dates the check "April 1." Eva Marie presents the check to the bank for payment on November 12. This is

Roald writes a check for $700 to Savannah. Savannah indorses the check in blank and transfers it to Twitchell, who alters the check to read $7,000 and presents it to Union Bank, the drawee, for payment. The bank cashes it. Roald discovers the alteration and files a suit against the bank. Roald can recover

A creditor-debtor relationship can exist between a bank and its customer.

A check that is presented for payment more than one month from its date is a stale check.

Fact Pattern 27-1A Mike loses his National Bank access card. He realizes his loss the next day but waits a week to call National. Meanwhile, Opal finds and uses Mike’s card to withdraw $3,000 from Mike’s account. -Refer to Fact Pattern 27-1A. Mike is responsible for

Brandy forges Caleb's signature on a check "payable to the order of Brandy" drawn on Caleb's account in Delphi Bank. Caleb's forged signature is

Thelma signs a check "pay to the order of Uri" drawn on Thelma's account in Verity Bank. Thelma has $400 in her account but the amount of the check is $500, which the bank pays. This is

Fact Pattern 27-1A Mike loses his National Bank access card. He realizes his loss the next day but waits a week to call National. Meanwhile, Opal finds and uses Mike’s card to withdraw $3,000 from Mike’s account. -Refer to Fact Pattern 27-1A. When Mike receives his National statement, he demands that the bank investigate the matter and recredit his account. The bank

Any local check deposited must be available for withdrawal by check or as cash within one business day from the date of deposit.

If a bank fails to detect an alteration on a customer's check, it is liable to its customer for the loss.

Liu signs a check "pay to the order of Marv" drawn on Liu's account in National Bank. Liu later orders National not to pay the check, but the bank pays it over Liu's order. Subsequent checks written on Liu's account "bounce." Most likely liable for the costs to Liu is

Each bank in a collection chain must pass a check on before midnight of the next business day following its receipt.

First Community Bank agrees to accept a check by setting aside sufficient funds to cover the amount. This check is considered

Smith & Jones Associates is a business customer of Superior Bank. Under federal law, Smith & Jones cannot demand

A certified checks is an instrument that has been accepted for payment by the bank on which it is drawn.

Elmo pays First National Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service. This is