A Bank That Pays a Customer's Check with a Forged

question 52

True/False

A bank that pays a customer's check with a forged indorsement must recredit the customer's account.

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Definitions:

Suretyship Contract

An agreement whereby a party (surety) guarantees the performance of an obligation by another party (principal) to a third party (obligee).

Primarily Liable

The main party responsible for fulfilling an obligation or settling a debt in legal or financial contexts.

Secondarily Liable

Refers to a party who is indirectly responsible for a debt or obligation, where primary liability lies with another party, but the secondary party may be called upon to fulfill the obligation if the primary fails to do so.

Collateral

Assets that are pledged as security for the repayment of a loan, which can be seized by the lender if the borrower fails to repay the loan as agreed.