Quincy signs a check payable to Richland Investors,Inc.,and gives it to Richland,leaving the amount blank but authorizing Richland to fill in the check for $1,000.Richland fills in $1,500 and negotiates the check to Silverado Bank,to whom Richland owes $1,500.Silverado Bank,an HDC,can enforce the check for

Question

Quizplus · Accepted Answer

As an HDC, Silverado Bank can enforce the check for the full amount of $1,500, despite the fact that the amount written on the check differs from the amount Quincy authorized Richland to fill in. Under the principle of "negotiable instrument," an HDC takes a check for value, in good faith, without notice of any problems, and without any knowledge of any unauthorized alterations. In this case, Silverado Bank took the check in good faith and for value, since Richland owed them $1,500. Therefore, they are entitled to enforce the check for its full amount of $1,500.

Quincy Signs a Check Payable to Richland Investors,Inc