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1

Sullivan signs a check "pay to the order of Tilly" drawn on Sullivan's account in Universal Bank. Velma forges Tilly's indorsement, Washington Bank cashes the check. Velma disappears. Universal pays Washington and debits Sullivan's account. Most likely, the ultimate loss will fall on

2

Under Check 21, the maximum time that a bank can hold funds from deposited checks before making them available to the depositor will increase.

3

A bank that has certified a check is under no obligation to accept it.

4

Fact Pattern 27-1BEcho takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair the car properly, issues a stop-payment order.Refer to Fact Pattern 27-1B. If Capital Bank pays the check, Capital

5

Gaining unauthorized access to an electronic fund transfer system constitutes a federal felony.

6

Tom draws a check, on his account in State Bank in New York, payable to Digital Computers, Inc., in San Francisco. Digital deposits the check in its ac¬count at First National Bank. First National deposits the check in the Federal Reserve Bank of San Francisco, which transfers it to the Federal Reserve Bank of New York. That Federal Reserve bank sends the check to State Bank.

7

A drawer must have a valid legal ground for issuing a stop-payment order, or the holder can sue the drawer for payment.

8

A bank has no right to charge a customer's account for the amount of a stale check.

9

Cornucopia Bank receives a check drawn on the account of Get-Rich Industries, Inc., one of the bank's customers, at 3 p.m. Friday. Harry, the presenter of the check, is not one of the bank's customers. The bank uses deferred posting with a 2 p.m. cutoff hour. If it decides to dishonor the check, it must do so by midnight

10

Whenever a bank-customer relationship is established, certain contractual rights and duties arise.

11

Daisy writes a check to Elvita on her account at First Savings Bank. The bank dishonors the check even though Daisy has sufficient funds in her account. The bank is

12

On Monday, Eve deposits in her account at First State Bank a local check for $500. After 5:00 p.m. on Friday, from these funds, Eve can withdraw no more than

13

Daria writes a check for $100 drawn on Estimable Bank and presents it to Fast Cash, Inc., for payment. If the check is not backed by sufficient funds, Daria may be prosecuted for

14

A bank may charge a postdated check against a customer's account.

15

When a bank properly dishonors a check for insufficient funds, it has no liability to the customer.

16

Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair the car properly, issues a stop-payment order.

17

Steve steals one of Tricia's checks and forges her signature. Tricia's bank, Unity Bank, pays the check. Tricia can recover from

18

Brendan signs a check "pay to the order of City College Bookstore" drawn on his account in Delmar Bank to pay for his current semester's textbooks. The bookstore deposits the check in its account in Evergreen Bank. Like most checks, this check is

19

Delilah's debit card, issued by Encarta Bank, is stolen and used without Delilah's permission. Delilah tells the bank within thirty days. Delilah may be required to pay no more than

20

No one can refuse to accept a substitute check as proof of payment.

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