Worksheet 28.1: Checks and the Bank-Customer Relationship
If a conflict arises between Articles 3 and 4, Article _______ controls.
4
Cashier's check
A check drawn by the bank on itself
Certified check
A check that has been accepted by the bank on which it is drawn. Essentially, the bank, by certifying (accepting) the check, promises to pay the check at the time the check is presented.
Traveler's check
A check that is payable on demand, drawn on or payable through a bank, and designated as a traveler's check
Check
A draft drawn by a drawer ordering the drawee bank or financial institution to pay a certain amount of money to the holder on demand.
When a bank wrongfully dishonors a cashier's check, what can a holder recover?
All expenses incurred, interest, and consequential damages
In what manner does a bank certify a check?
By writing or stamping the word "certified" on the face of the check
Which of the following is NOT a type of transaction that commonly uses cashier's checks?
Payments for monthly rent
Checks are the most common type of negotiable instruments regulated by the Uniform Commercial Code.
T
Once a check is certified, the drawer and any prior indorsers are completely discharged from liability on the check.
T
The legal relationship between a bank customer and the bank can be described as a(n):
agency relationship.
The main focus of Article 4 of the UCC is:
establishing a framework for banking relationships
Avelene makes her monthly payments on her student loan by writing a check payable to the U.S. Department of Education (DOE). With respect to Avelene's check, the DOE is the:
payee
With a _____ , the bank serves both as the drawer and the drawee.
cashier's check
Cleveland's ex-wife, Marissa, obtains a court order that requires Cleveland to make his child support payments with a check that his bank guarantees. This type of check is known as a:
certified check.
When a stock brokerage firm handles a check for payment or collection, then the:
check is not covered by Article 4