Darrell Owes Judy $50

question 25

Multiple Choice

Darrell owes Judy $50.He naively signs a blank check and tells Judy to fill it out for $50.Judy takes the opportunity to steal money from Darrell and fills in the check for $500.Judy then takes the check to the payor bank,cashes it,and is never heard from again.Which of the following is correct?

• A) If the bank pays the check, it is liable for $450. This is an altered check, so Darrell is liable for the original tender of $50.
• B) If the bank pays the check, it is not liable at all since Darrell bears the risk of loss for giving the signed, incomplete check to Judy. The bank may be liable if it was on notice that the completion was improper.
• C) If the bank pays the check, it is liable for $500.
• D) Darrell and the bank will share the loss equally.

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Definitions:

Carbonic Acid

A weak acid formed in solution when carbon dioxide dissolves in water.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration. It is naturally present in the air and is absorbed by plants in photosynthesis.

Baking Soda

A chemical compound also known as sodium bicarbonate, used in baking as a leavening agent and for cleaning.

Coffee

A brewed drink prepared from roasted coffee beans.