QUESTION 1

1. Jim wrote a post-dated check onDecember 22and gave it to one of his creditors that day.The check was datedDecember 30.The creditor deposited Jim's check right away, and it was presented to Jim's bank for payment onDecember 24.Jim's bank paid it.As a result, there was not enough money in Jim's account on December 27 to cover another check that Jim wrote, and that check "bounced" (meaning it was dishonored due to insufficient funds in Jim's account).The bank charged Jim a $30 fee for the bounced check.What is thebank's liabilityregarding this bounced check?

A. The bank has no liability.

B. The bank must compensate Jim for any losses that result from this bounced check.

C. The bank is liable, but only for the $30 bank charge related to the bounced check.

D. The bank is liable, but only for the immediate, direct damages that result from the bounced check.

QUESTION 2

Jack received a check as payment for work he did. He indorsed the check "without recourse". This has what legal effect?

A. The drawer of the check is discharged from primary liability on the check

B. The drawer of the check is discharged from secondary liability on the check

C. Jack is discharged from secondary liability on the check

D. Jack is discharged from primary liability on the check

QUESTION 3

Tom wrote a check to Mary for $10.Tom was careful and not negligent in the way he wrote the check.Nevertheless, Mary cleverly altered the check to read $1,000.Tom's bank cashed this check and deducted $1,000 from his account.Which of the following iscorrect?

A. Tom is liable on this check, but only for $10

B. Tom is liable on this check for $1,000C.Tom is liable on this check for nothing

D. Tom must reimburse the bank for any losses it suffers related to this check

QUESTION 4

A check bearing a forged drawer's signature is not properly payable and its amount is not properly chargeable to the customer's account.

True

False

QUESTION 5

Slick steals Sad Sally's checkbook, completes a check for $1000, forges Sally's signature, and gets payment from Slick's bank. The bank paid in good faith. Who is liable to the bank for the $1000 in this case?

A. Slick.

B. Sad Sally.

C. Both Slick & Sally.

D. Neither Slick nor Sally.

BUS LAW I 243- CH 33, 34