Anupama drew a check on her account at Mortimer Bank payable to the order of Prahlad. When Prahlad presented the check for payment, Mortimer Bank refused to honor the check. Under these circumstances, the bank _____.

Question

Quizplus · Accepted Answer

A drawee has no liability on a check or other draft unless it certifies or accepts the check or draft-that is, agrees to be liable on it. However, a drawee bank that refuses to pay a check when it is presented for payment may be liable to the drawer for wrongfully refusing payment, assuming the drawer had sufficient funds in his checking account to cover it. In this scenario, the bank may be liable to Anupama for wrongfully refusing payment if Anupama has sufficient funds in her checking account to cover it.

Anupama Drew a Check on Her Account at Mortimer Bank