Asked by Schyler Molloy on Jul 22, 2024
Verified
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?
A) The bank is not liable for any damages to Hailey since it has the right to honor a postdated check if presented earlier.
B) Hailey can file a lawsuit against Marsha for presenting a postdated check earlier than instructed and causing her loss.
C) Hailey is liable to pay damages to Marsha,in addition to the rent,and a $50 fine to the bank for lack of funds.
D) The bank is liable to pay Hailey damages for honoring the check before the date mentioned in the notice.
Postdated Check
A check written with a future date, which cannot be cashed or deposited until that date.
Insufficient Funds
A situation where an account does not have enough money to cover transactions, resulting in a bounced check or declined payment.
Rental Contract
A legal agreement between a landlord and a tenant outlining terms, conditions, and duration of tenancy for a rental property.
- Learn about the bank's responsibilities and liabilities in scenarios involving checks that are not honored, checks dated for a future occasion, and stop-payment orders.
- Determine and describe the outcomes of insufficient balances and the banking fees related to returned checks.
Verified Answer
VC
Vanessa colonJul 24, 2024
Final Answer :
D
Explanation :
If the bank charges the customer's account for a postdated check before the date stated in the notice given to the bank,the bank is liable for damages for any loss that results.Such damages might include those associated with the dishonor of subsequent items.
Learning Objectives
- Learn about the bank's responsibilities and liabilities in scenarios involving checks that are not honored, checks dated for a future occasion, and stop-payment orders.
- Determine and describe the outcomes of insufficient balances and the banking fees related to returned checks.