Ray Patel, a Local DJ, Bought Sound Equipment from Backstage

question 52

Multiple Choice

Ray Patel, a local DJ, bought sound equipment from Backstage Equipment Inc. and paid by three post-dated cheques of $10,000 each. Backstage took out a loan for $30,000 and endorsed the cheques to its bank as security for the loan. The equipment totally failed and Patel wants to stop payment against the bank. Will he be successful?

• A)Yes, because the equipment did not work.
• B)Yes, if he put a stop payment before the due dates on the cheques
• C)No, because the bank is a holder in due course.
• D)No, because the bank actually lent $30,000 to Backstage.
• E)No, because the bank has a loan agreement with Backstage.

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Definitions:

Metabolize

The process by which living organisms transform food into energy and building blocks for cells, or breaking down of substances to excrete waste.

Body Systems

Organized groups of tissues that work together to perform complex functions for the body, such as the circulatory, digestive, and nervous systems.

Breast Milk

The milk produced by human mammary glands, specifically designed to nourish infants with necessary nutrients for growth and development.

Excreted

The process by which waste products of metabolism are eliminated from an organism, usually through urine, feces, sweat, or exhalation.