Business Law - Chapter 14

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Author:
chanthalyxay
ID:
252171
Filename:
Business Law - Chapter 14
Updated:
2013-12-09 21:39:22
Tags:
Business Law
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Description:
Chapter 14 - Checks and Banking in the digital age
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  1. What are the different types of checks
    • Cashiers
    • Traveler's
    • Certified Check
  2. Define Cashier's Check
    A check drawn by a bank on itself and purchased by a customer
  3. Define Traveler's Check
    • An instrument on which a financial institution is both the drawer and the drawee
    • purchaser must prove his/her signature as a countersignature for a traveler's check to become a negotiable instrument
  4. Define Certified Check
    • a check for which the drawee bank certifies in writing that it has set aside funds from the drawer's account to ensure payment of the check on presentation.
    • on certification the drawer and all prior indorsers are completely discharged from liability on the check
  5. What is the banks duty to honor checks that are overdraft, posted dated, stale check, stop-payment order, death or incompetence of a customer, forged signature or alteration
    • overdraft: the bank has the right to charge a customer for any items properly payable
    • Postdated check: the bank may charge a postdated check against a customer's account, unless the customer notifies the bank of the postdating in time to allow the bank to act on the customer's notice before paying on the check
    • Stale Check: the bank is not obligated to pay an uncertified check presented more than six months after its date, but the bank may do so in good faith without liability
    • stop-payment order: the customer must make a stop-payment order in time for the bank to have a reasonable opportunity to act
    • Death or incompetence of a customer: if the bank does not know of the death or incompetence of a customer, the bank can pay an item without liability
    • Forged signature or alteration: The customer has a duty to examine account statements with reasonable care on receipt and to notify the bank promptly of any forged signatures or alteration
  6. What are the different types of electronic fund transfers
    • atms
    • point-of-sale systems
    • direct deposits and withdrawals
    • internet payment systems

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