Morris issued a check to Al in payment of a debt. There were sufficient funds in Morris' account to cover the check when it was presented for payment. However, due to an error, the bank dishonored the check. Which of the following parties is/are potentially liable to the holder?

Question

Quizplus · Accepted Answer

Morris is liable to the holder because he issued the check. The drawee bank is not liable to the holder for dishonoring the check due to an error, as its obligation is to its customer, Morris, not the holder.

Morris Issued a Check to Al in Payment of a Debt