If Valley Bank Pays a Check Over a Stop Payment

question 40

Multiple Choice

If Valley Bank pays a check over a stop payment order of one of its customers,Valley Bank is subrogated to the rights of:

• A) the drawer against the payee or any other holder.
• B) any holder in due course on the item against the drawer.
• C) the payee or any other holder against the drawer.
• D) All of these are correct.

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Definitions:

Improper Threat

A form of coercion that is illegitimate or unethical, used to induce another party to act in a manner they otherwise would not.

Assertion

An assertive declaration of truth or conviction.

Mutual Mistake

A legal concept where both parties involved in a contract have a misunderstanding about an essential fact of the agreement, potentially making the contract voidable.

Fair Market Value

The price at which an asset would exchange hands between a willing buyer and seller, each having reasonable knowledge of the relevant facts, and neither being under compulsion to transact.