Chapter 23 Notes

Chapter 23 Notes - Ch. 23 Check a draft drawn by a drawer...

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Ch. 23 Check – a draft drawn by a drawer ordering the drawee bank or financial institution to pay a fixed amount of money to the holder on demand Cashier’s check – a check drawn by a bank on itself Traveler’s check – a check that is payable on demand, drawn on or payable through a financial institution (bank), and designated as a traveler’s check Certified check – a check that has been accepted in writing by the bank on which it is drawn. Essentially, the bank, by certifying the check, promises to pay the check at the time the check is presented The Bank-Customer Relationship Creditor-Debtor Relationship o When a customer makes a deposit, the customer becomes a creditor, and the bank a debtor Agency Relationship o Customer writes a check on his account Bank becomes customer’s agent and is obligated to honor the customer’s request o Customer deposits check Bank becomes customer’s agent and is obligated to collect payment on the check from the bank on which the check was drawn Contractual Relationship o Contractual rights and duties arise with bank-customer relationships Bank’s Duty to Honor Checks Overdraft – a check that is paid by the bank when the checking account o which the
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This note was uploaded on 04/09/2012 for the course LAW LAW taught by Professor Ricks during the Spring '09 term at Rutgers.

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Chapter 23 Notes - Ch. 23 Check a draft drawn by a drawer...

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