A certified check was presented for payment to the drawee bank, and the drawee bank dishonored the check. Which of the following parties is/are potentially liable to the holder?

Question

Quizplus · Accepted Answer

The drawer and the drawee are both potentially liable to the holder of a certified check that is dishonored by the drawee bank. The drawer is liable because they are the party who drew the check and ordered the drawee bank to pay the funds. The drawee bank is liable because they are the party who certified the check, which is a guarantee that the check will be paid when presented for payment.

A Certified Check Was Presented for Payment to the Drawee