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fall 2010 bule 402 liability for NI banks

fall 2010 bule 402 liability for NI banks - Commercial...

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2/6/11 Commercial Transactions: Liability for Negotiable Instruments Banks and Their Customers Prof. Julie Shubin Bule-402-002-S10 Commercial Law © Julie Shubin 2010
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2/6/11 “This area of law is important because virtually everyone has written a check or used an ATM and because the law regarding these transactions is changing rapidly.”
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2/6/11 Who’s Who Despositary Bank – the first to take check. Payor Bank – the bank that pays the issuer’s check. Intermediary Bank – any bank that handles a check during the collection process, except the depositary or payor bank. Collecting Bank -- any bank that handles a check during the collection process, except the payor bank. Presenting Bank – a bank that submits a check to the payor bank.
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2/6/11 Bank’s Duty to Provide Information A bank is not required to provide a monthly statement, but most do. A statement (if provided) must disclose: Interest rate paid Amount of interest earned Fees imposed by the bank The number of days covered by the statement When an account is opened (and in ads), the bank must disclose:
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2/6/11 The Bank’s Duty to Pay A bank must pay a check if the check is authorized by the customer and complies with the terms of the checking account agreement. A bank is not required to pay a check on an overdrawn account, but may choose to do so. It is then allowed to either
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2/6/11 Wrongful Dishonor If a bank violates its duty and wrongfully dishonors an authorized check, it is liable to the customer for all actual and consequential damages.
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