Asked by Teresa Navarro P on May 20, 2024
Verified
________ is when a bank observes the reasonable commercial standards prevailing among other banks in the area in which it does business.
A) Good faith
B) Ordinary care
C) Reasonable care
D) Due care
Ordinary Care
The level of care that a reasonably prudent person would exercise in similar circumstances; a standard for negligence determination.
Reasonable Care
The degree of caution and concern an ordinarily prudent person would use in similar circumstances, often used as a standard for determining negligence.
Good Faith
An honest intention to act without taking an unfair advantage over another party.
- Recognize the standards banks must observe, such as ordinary care and good faith, in their operations.
Verified Answer
GA
GERALDINE ARANETAMay 26, 2024
Final Answer :
B
Explanation :
The bank has a duty to exercise "ordinary care" in the processing of negotiable instruments;it must observe the reasonable commercial standards prevailing among other banks in the area in which it does business.
Learning Objectives
- Recognize the standards banks must observe, such as ordinary care and good faith, in their operations.