Asked by Pablo Porcayo on May 12, 2024
Verified
Hot Dress.Doreen writes a check for a dress to Hot Dresses,Inc.,a small specialty shop owned primarily by Betty.Betty was getting ready to go on an extended European vacation and temporarily closed the shop the day after the dress sale to Doreen.When Betty returned,she had a number of other things to do and did not take Doreen's check and some other checks to the bank for three months.Betty was independently wealthy and only ran the shop as a hobby,so she had not been in need of funds.When Betty finally took Doreen's check to the bank,Betty requested that her bank,ABC Bank,deposit the check into her account.However,when ABC Bank requested payment from Doreen's bank,XYZ Bank,the check was dishonored because of insufficient funds in Doreen's account.Although Betty did not particularly need the funds,she did not like to feel as if she had been cheated; therefore,she demanded that Doreen make the check good.Which of the following parties would be considered the drawer of the check Doreen presented to Betty at Hot Dresses,Inc.?
A) Doreen
B) Hot Dresses,Inc.
C) Betty,because she owns Hot Dresses,Inc.
D) Doreen's bank
E) Betty's bank
Negotiable Instrument
A transferable, signed document that promises to pay the bearer or named party a certain sum of money either on demand or at a specified future date.
Drawer
In the context of financial instruments, the entity that writes or issues a check or draft.
Dishonored
A term used when a financial instrument like a check or promissory note is not accepted or paid on presentation.
- Understand the roles and definitions of parties involved in negotiable instruments (drawer, drawee, holder, etc.).
Verified Answer
MB
Mylene BaronaMay 14, 2024
Final Answer :
A
Explanation :
According to Uniform Commercial Code Section 3-103(a)(5),a drawer is a person who signs as a party ordering payment.
Learning Objectives
- Understand the roles and definitions of parties involved in negotiable instruments (drawer, drawee, holder, etc.).