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lauritta
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Joined: 02 Jan 2011
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Posts: 83

Posted: 25 May 2012 at 12:02 \| IP Logged

I have a question regarding the liabilities - commercial
paper.

On August 1, Titan wrote a personal check that was drawn
on First Plymouth Bank and made payable to Brass. Brass,
on August 2, presented the check to First Plymouth Bank
for payment, which was refused. Who had primary liability
on this check?

a. No one on August 1 or August 2.
b. First Plymouth on August 2 but not on August 1.
c. Titan on August 2 but not August 1.
d. First Plymouth on August 1 but not on August 2.

Why the answer is a? Why Titan does not have primary
liability? He wrote the check. Thank you very much!

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nolifecpa
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Joined: 12 Jun 2010
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Posts: 135

Posted: 28 May 2012 at 16:47 \| IP Logged

For checks that are endorsed, no party initially has primary liability until
acceptance by the drawee bank
There is no obligation for drawee bank to honor the check and its only
primarily liab AFTER drawee bank accepts it

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lauritta
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Joined: 02 Jan 2011
Online Status: Offline
Posts: 83

Posted: 28 May 2012 at 17:29 \| IP Logged

Thank you so much for your answer!

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REG - passed
AUD -
Wiley, some lectures from Becker

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