Which of the Following Is True of a Bank's Duty

question 39

Multiple Choice

Which of the following is true of a bank's duty to honor checks?

• A)The drawee bank is not under a duty to honor all checks drawn by its customers in presence of sufficient funds in the customers' accounts.
• B)If there are insufficient funds on deposit,the bank may charge the customer's account if it does not create an overdraft.
• C)If a bank fails to honor a check because of a mistake on its part,the bank is liable to the customer for damages the customer suffers.
• D)The drawee bank has a liability to the holder of the check,regardless of whether the check is certified.

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Definitions:

Contractual Systems

The collection of legal agreements used in franchising, distribution, and other business arrangements that define the terms of relationships between parties.

Franchising

Franchising is a method of doing business wherein a franchisor grants the rights to an individual or entity (franchisee) to operate a business model using the franchisor’s brand and system.

Contractual System

A system based on legal agreements between parties that govern their business relationships and transactions.

Self-Service

A business model or system where customers perform actions or obtain services by themselves, often facilitated by technology, without direct assistance from staff.