Fact Pattern 28-2B (Questions B16-B18 Apply)

question 18

Multiple Choice

Fact Pattern 28-2B (Questions B16-B18 apply)
Belle draws a check on her account in Capital Credit Bank in New York, payable to Distribution Marketing, Inc., in San Francisco. Distribution Marketing deposits the check in its ac?count at Equity Bank. Equity Bank deposits the check in the Federal Reserve Bank of San Francisco, which transfers it to the Federal Reserve Bank of New York. That Federal Reserve Bank sends the check to Capital Credit.
-Refer to Fact Pattern 28-2B. Central City, Distribution Marketing's bank, is

• A) the cashing bank.
• B) the depositary bank.
• C) the intermediary bank.
• D) the payor bank.

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Definitions:

Tender

An offer to perform an obligation or to pay an amount specified in a contract.

Full Performance

The complete execution of all terms and obligations specified in a contract or agreement.

Obligation

A duty or commitment one party has to perform or refrain from performing specified actions as per a contract or legal requirement.

Novation

The act of replacing an existing obligation with a new one, transferring rights and duties from the original party to a new party.