In this case ONB properly refused the rights of the cheque as Betty did not indorse the cheque. In the case of two parties to the cheque both have to indorse it. Yes the bank did the right thing in debiting Dan’s account as the cheque has not been cashed at ONB. Dan has the right to sue Bill as the cheque has been dishonored. However, one thing may hold against Dan as it was his duty to properly check the instrument before forwarding it to the bank. Dan does not hold any right against Betty as he does not hold any connection with the negotiation.
The onus is on Bill in this case as Betty is perhaps not informed about the negotiation. Dan has no right against Adam as Adam negotiated the cheque earlier and he dispelled any relation with the negotiable instrument. USA Commercial Law at La Trobe, n. d. ) Question Seven Stan owed Julia USD $42,500 for the purchase of equipment for Stan’s business. Stan gave Julia a negotiable check payable to Julia for USD $42,500 drawn on Octopus National Bank (ONB) in satisfaction of that debt.
A thief stole the check out of Julia’s desk at her office, indorsed the check by signing Julia’s name, and cashed it at Calamari State Bank (CSB). Immediately after the check cleared, Stan closed his account at ONB because ING Bank offered him a better suite of banking services. Elroy Electronics owed Julia a rebate for $USD 3,500 and mailed her a check payable to Julia for USD $3,500 drawn on ONB. Elroy mailed the rebate check to the wrong address.
An unknown person indorsed the rebate check by signing Julia’s name and cashed it at ONB. In this case, ONB does not owe Julia anything. Julia cannot proceed against ONB because the bank worked under the law by accepting the cheque and honoring it. If ONB is liable to Julia, the bank cannot owe anything from CSB as CSB worked under the rules by accepting the cheque. If Julia has an underlying contract separate from the cheque, the contract would have come to an end with the payment of the cheque.
In this case, Julia cannot proceed against Stan. No, Julia cannot proceed against ONB as the bank cleared the cheque under the rules and regulations. In the case of Elroy Electronics, Julia can proceed because it is the company’s fault where it was mailed to the wrong address. It is the duty of the company under the law to deliver the right goods at the right place. In this case, Elroy Electronics is liable.
The onus is on Bill in this case as Betty is perhaps not informed about the negotiation. Dan has no right against Adam as Adam negotiated the cheque earlier and he dispelled any relation with the negotiable instrument. USA Commercial Law at La Trobe, n. d. ) Question Seven Stan owed Julia USD $42,500 for the purchase of equipment for Stan’s business. Stan gave Julia a negotiable check payable to Julia for USD $42,500 drawn on Octopus National Bank (ONB) in satisfaction of that debt.
A thief stole the check out of Julia’s desk at her office, indorsed the check by signing Julia’s name, and cashed it at Calamari State Bank (CSB). Immediately after the check cleared, Stan closed his account at ONB because ING Bank offered him a better suite of banking services. Elroy Electronics owed Julia a rebate for $USD 3,500 and mailed her a check payable to Julia for USD $3,500 drawn on ONB. Elroy mailed the rebate check to the wrong address.
An unknown person indorsed the rebate check by signing Julia’s name and cashed it at ONB. In this case, ONB does not owe Julia anything. Julia cannot proceed against ONB because the bank worked under the law by accepting the cheque and honoring it. If ONB is liable to Julia, the bank cannot owe anything from CSB as CSB worked under the rules by accepting the cheque. If Julia has an underlying contract separate from the cheque, the contract would have come to an end with the payment of the cheque.
In this case, Julia cannot proceed against Stan. No, Julia cannot proceed against ONB as the bank cleared the cheque under the rules and regulations. In the case of Elroy Electronics, Julia can proceed because it is the company’s fault where it was mailed to the wrong address. It is the duty of the company under the law to deliver the right goods at the right place. In this case, Elroy Electronics is liable.
Source: law aspect
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