What Is the Effect of a Payor Bank's Dishonor of a Check

question 5

Multiple Choice

What is the effect of a payor bank's dishonor of a check?

• A) It returns the check.
• B) The provisional credits must be reversed.
• C) The customer who deposited the item for collection must cover the item and seek recovery from the drawer or indorsers.
• D) All of these will occur.

---

Definitions:

Equitable Remedies

Court-enforced actions directed at a party in a civil lawsuit, aimed at correcting a legal wrong or injustices, such as orders for specific performance, injunctions, and rescissions.

Anticipatory Breach

A declaration or act by one party to a contract that they do not intend to fulfill their future obligations, allowing the other party to take legal action before the breach occurs.

Implied Condition

An implied condition refers to a term not explicitly stated in a contract but considered to be included and necessary for the fulfillment of the contract's purpose.

Express Condition

A condition specifically and explicitly stated in a contract and usually preceded by words such as conditioned on, if, provided that, or when.