Asked by Megan Smith on Jul 24, 2024
Verified
The case, State of Qatar v. First American Bank of Virginia , held that:
A) the phrase "for deposit only" is not an effective restrictive indorsement.
B) depositary banks are not required to handle checks consistent with the restrictive indorsement.
C) the phrase "for deposit only" effectively limits the depositary bank to handle the instrument in a manner consistent with the transaction.
D) a stolen check which is indorsed in blank cannot be freely negotiated by the bearer.
Restrictive Indorsement
A signature on a negotiable instrument, such as a check, that limits how the instrument can be used.
Depositary Banks
Banks that hold securities (such as shares or bonds) in custody for other parties, facilitating securities trades and dividend payments.
State of Qatar
A sovereign country located in Western Asia, occupying the small Qatar Peninsula on the northeastern coast of the Arabian Peninsula.
- Absorb information regarding the responsibilities and impacts of indorsements, highlighting special, blank, and restrictive variants.
- Recognize the implications of specific case rulings on the handling of negotiable instruments.
Verified Answer
Learning Objectives
- Absorb information regarding the responsibilities and impacts of indorsements, highlighting special, blank, and restrictive variants.
- Recognize the implications of specific case rulings on the handling of negotiable instruments.
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