Notice of Dishonor of an Instrument Must Be Given

question 55

Multiple Choice

Notice of dishonor of an instrument must be given:

• A) by a bank before midnight of the third banking day following the banking day on which it receives notice of dishonor.
• B) in all situations within seven calendar days following the day on which dishonor occurred.
• C) by a nonbank, with respect to an instrument taken for collection, within three business days following the day on which it received notice.
• D) by a bank before midnight on the next banking day following the banking day on which it receives notice of dishonor.

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Definitions:

Submission Agreement

A legal agreement where parties agree to submit a current or future dispute to arbitration, without necessarily specifying the details of the arbitration process.

Lawsuit

A legal action initiated by one party against another in a court of law to enforce or defend a legal right.

Binding Arbitration

A dispute resolution process where an impartial third party renders a decision that is final and legally binding on all involved parties.

Enforcement Lawsuit

A legal action taken to ensure compliance with laws, regulations, or court orders, often initiated by a governing body or regulatory authority.