Multiple Choice
On April 5,Tim gave Winnie a cheque for $3000 drawn on his bank account to pay for a horse.The cheque was postdated to April 15.On April 7,the horse died,and Tim stopped payment on the cheque.On April 12,Winnie took Tim's cheque to Big Bank and endorsed it.Big Bank gave her cash in the face amount of the cheque.When Big Bank sent the cheque for clearing,Tim's bank refused to honour the cheque because of the stop payment Tim had placed on it and returned the cheque to Big Bank.Which of the following statements is true?
A) A postdated cheque is not a negotiable instrument.
B) One cannot stop payment on a cheque.
C) Tim is not liable to Big Bank because he put a stop payment on the cheque before Winnie endorsed it over to Big Bank.
D) Only Winnie is liable to Big Bank.
E) Tim is liable to Big Bank because Big Bank is a holder in due course of a negotiable instrument.
Correct Answer:
Verified
Correct Answer:
Verified
Q11: Negotiable instruments are different from other contracts.Explain
Q15: Who is a holder in due course,and
Q19: Explain the difference between a bearer instrument
Q27: Liability of the drawee on a bill
Q35: The Bills of Exchange Act governs which
Q42: Which of the following is NOT a
Q43: Jack provides James with a cheque in
Q48: Explain the consequences when a document is
Q56: Joseph obtains a draft that states as
Q58: Who is a drawee?