Author Question: On March 1 Donna wrote a check for 296 to Sun Services. When will the check be overdue? What is the ... (Read 74 times)

nenivikky · **on:** Jun 24, 2018

On March 1 Donna wrote a check for 296 to Sun Services. When will the check be overdue? What is the effect of the check's being overdue? What is the effect if the check is stamped Insufficient Funds by Donna's bank?

Question 2

B is known in the trade as a trader and merchant of soybeans. A entrusts a load of soybeans to B for storage in B's warehouse. Secretly, B delivers the goods to an ocean carrier in return for a bill of lading. B then sells the document covering a shipment of soybeans to C, who has purchased soybeans from B in the past. C pays for the document through its bank. B absconds with the money. In this case:
A) A may demand return of the soybeans from C.
B) C has greater rights in the soybeans than A.
C) A's only remedy is against the ocean carrier.
D) C's bank is liable for committing a conspiracy against A.

kaylee05 · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

A check is overdue 90 days after its date. When an instrument is overdue, a recipient is on notice that it may have a defect. The UCC states that a holder in due course is a holder who has given value for the instrument, in good faith, without notice of outstanding claims or other defects. If a check is marked Insufficient Funds by a bank, it has been dishonored. No one who obtains it afterward can be a holder in due course.

Answer to Question 2

B