Tanika Has a Checking Account at First Bank

question 6

Multiple Choice

Tanika has a checking account at First Bank.Orrin steals one of her blank checks,writes a check for $250,and then forges Tanika's signature.He then presents the check to First Bank for payment.First Bank pays the forged instrument.Which of the following statements is correct?

• A) First Bank will have to recredit the $250 to Tanikas account,but they can collect from Orrin if they can find him and he has the money.
• B) First Bank will have to recredit the $250 to Tanika's account,but only if they can collect the $250 from Orrin.
• C) Tanika is primarily liable on the check even if she did not sign it and was not negligent in allowing Orrin to take the blank check.
• D) First Bank is liable only if they have a signature card on file for Tanika.

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Definitions:

Third Restatement

A reference in U.S. legal doctrine, particularly in the context of tort law, to the latest revision of a comprehensive guide on legal principles.

Principal Incapacitated

Principal incapacitated refers to a situation where the principal party in a legal or financial agreement is unable to make decisions or fulfill their role, due to physical or mental incapacity.

Legal Status

The condition of an entity or individual’s standing in the eyes of the law, including rights, responsibilities, and current liabilities.

Power of Agent

The legal authority granted to an individual (agent) to make decisions and take actions on behalf of another person or entity (principal).