A drawee bank may be liable to its drawer customer if the bank refuses to honor the drawer's check when there are sufficient funds in the account.

Question

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A drawee bank has a responsibility to honor its customer's check as long as there are sufficient funds in the account. If the bank refuses to do so, it may be held liable for damages suffered by the drawer. This is because the bank's refusal to honor the check constitutes a breach of its obligation to its customer.

A Drawee Bank May Be Liable to Its Drawer Customer