[Three Checks] On January 1, Jerome writes two checks and dates them January 15, as he is waiting for a large deposit to clear on January 5. The first check is to Rhea, and the second check is to Treya. Treya deposits her check on January 2, but she is notified that the check is dishonored for insufficient funds. On February 1, Jerome writes a check for $50 to Kaleb. Kaleb adds a "0" to the check amount and scratches out the word "Fifty" and writes "Five Hundred" and deposits the check. Jerome dies on April 1. Rhea deposits her check on April 15, but the bank dishonors Rhea's check.
-Who is responsible for the check to Kaleb?

Question

Quizplus · Accepted Answer

The bank is responsible for the check because it cashed a check that had been altered. Banks have mechanisms and responsibilities to verify the authenticity and accuracy of checks before cashing them. If a check has been materially altered, such as changing the amount, it is the bank's responsibility to detect such alterations and act accordingly. In this case, the bank failed to identify the alteration made by Kaleb, making it responsible for the mishandled transaction.

[Three Checks] on January 1, Jerome Writes Two Checks and Dates