With respect to the secure position of a holder in due course,which of the following would most strongly support the reluctance of banks to honour cheques without verification of the various endorsements appearing on a cheque?

Question

Quizplus · Accepted Answer

The secure position of a holder in due course means that they can enforce payment of a cheque even if there are defects or irregularities in the endorsements on the cheque. This means that if a bank honours a cheque without verifying the endorsements, they run the risk of advancing funds that may not be recoverable if the endorsements turn out to be invalid. Therefore, the reluctance of banks to honour cheques without verification can be most strongly supported by the fact that they may be unable to recover advanced funds on an invalid cheque.

With Respect to the Secure Position of a Holder in Due