Asked by Madison Chrisman on Jul 15, 2024
Verified
In the case in the text Cincinnati Insurance Company v.Wachovia Bank National Association,what was the court's holding?
A) The bank was not liable because it limited its liability in the contract.
B) The bank was not liable because it acted in good faith.
C) The bank was liable because it did not provide any precautions to prevent fraud.
D) The bank was liable because it could not waive its liability in the contract.
Cincinnati Insurance Company
The Cincinnati Insurance Company is a US-based insurance provider that offers a range of insurance products, including life, business, and property and casualty insurance.
Liability
A legal responsibility or obligation.
Good Faith
A fundamental principle in contract law that requires all parties to act honestly and fairly without taking unfair advantage of others.
- Become familiar with the legal standards and banking guidelines on the treatment of checks and the implementation of stop-payment orders as reflected in case law.
Verified Answer
BC
Business ChemicalsJul 16, 2024
Final Answer :
A
Explanation :
The parties' agreement (deposit agreement)described a number of methods by which a customer could safeguard its account from fraud.The bank also provided a service called Positive Pay to help detect fraud,which the customer declined.Since the customer failed to take precautions against fraud,such as Positive Pay,the bank had limited liability under the deposit agreement.
Learning Objectives
- Become familiar with the legal standards and banking guidelines on the treatment of checks and the implementation of stop-payment orders as reflected in case law.