Assuming the Bank Is Not Negligent, in the Case of Multiple

question 78

Multiple Choice

Assuming the bank is not negligent, in the case of multiple forgeries by the same wrongdoer, what is the effect of a customer's failure to notify the bank of the first forgery in regard to subsequent forgeries?

• A) There is no effect because each forgery stands on its own.
• B) The customer is barred from recovering on the subsequent forgeries.
• C) The customer may recover on a subsequent forgery if it is reported to the bank within 5 days after the statement showing the subsequent forgery is received by the customer.
• D) The customer may recover on a subsequent forgery if it is reported to the bank within 10 days after the statement showing the subsequent forgery is received by the customer.
• E) The customer may recover on a subsequent forgery if it is reported to the bank within 15 days after the statement showing the subsequent forgery is received by the customer.

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Definitions:

Third Party Rights

Rights that are granted to individuals or entities who are not a direct party to a contract or legal agreement but are affected by its provisions.

Delegation

The act of transferring to another person the authority to perform a particular task or function.

Assignment

The transfer of rights, duties, or interests from one party to another.

Obligation

A legal or moral duty or responsibility that one party owes to another, enforceable by law.