Good Faith in Relation to Transactions Between Parties Who Are

question 25

Multiple Choice

Good faith in relation to transactions between parties who are not merchants means ____.

• A) Honesty in fact
• B) Honesty in law
• C) Honesty in fact and also reasonable commercial standards of fair dealing
• D) Honesty in law and also reasonable commercial standards of fair dealing
• E) Honesty in fact and honesty in law

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Definitions:

Checking Account

A bank account that allows the depositor to withdraw funds using checks or electronic debit, traditionally used for daily transactions.

Stale Check

A check that has not been cashed or deposited within a specified time, usually six months, making it void or invalid.

Bank

A financial institution that accepts deposits, offers various accounts, provides loans, and offers other financial services to individuals and businesses.

Restrictive Endorsement

A limitation placed on a check specifying the conditions under which it can be paid or transferred, often used for security purposes.