Asked by Cynthia Aborn on Jun 26, 2024
Verified
Chad writes Dina an uncertified check for $500 drawn on Chad's account at Employees Credit Union. Seven months later, Dina presents the check for payment. The credit union pays the check in good faith without consulting Chad. The credit union
A) cannot charge Chad's account for any amount.
B) can charge Chad's account for $250 only.
C) can charge Chad's account for $500.
D) is liable for breach of contract.
Uncertified Check
An uncertified check is a personal or business check that has not been verified or guaranteed by the bank upon which it is drawn, as opposed to a certified check.
Good Faith
A principle that denotes honesty or sincerity of intention in the fulfillment of one's duties and agreements.
Breach Of Contract
A violation of any agreed-upon terms and conditions in a binding contract.
- Define and interpret the legal aspects of check issuance, non-acceptance, and compensation according to the Uniform Commercial Code.
- Learn about the responsibilities and probable liabilities involved for banks in the treatment and processing of checks.
Verified Answer
AK
Anastacia KuzminaJul 02, 2024
Final Answer :
C
Explanation :
The credit union can charge Chad's account for $500 because the check is a valid order to pay the specified amount from Chad's account, and the credit union acted in good faith by honoring the check when presented by Dina.
Learning Objectives
- Define and interpret the legal aspects of check issuance, non-acceptance, and compensation according to the Uniform Commercial Code.
- Learn about the responsibilities and probable liabilities involved for banks in the treatment and processing of checks.