Asked by ESTELA LUCCHESI on Apr 29, 2024
Verified
If a bank pays a forged check,it is liable for ________ the payee's funds.
A) converting
B) detaining
C) withholding
D) diverting
Forged Check
A check that has been illegally modified or fabricated entirety by someone other than the account holder, intended to deceive and facilitate unauthorized transactions.
Liable
Legally responsible or answerable for an action or event, potentially subject to legal obligations or compensations.
- Identify the conditions under which a bank can be held liable for paying a forged check.
Verified Answer
PM
Pratishtha MathurMay 02, 2024
Final Answer :
A
Explanation :
When a bank pays a forged check, it is considered to have converted the payee's funds, meaning the bank has taken the payee's funds without their consent or authorization. As a result, the bank is liable for the amount of the forged check and any damages caused by the conversion.
Learning Objectives
- Identify the conditions under which a bank can be held liable for paying a forged check.