For a drawee to be obligated to honor a time draft, the drawee must be obligated to the drawer by
A)a stated time in the future.
B)an international trade agreement.
C)a commercial money market contract.
D)an account agreement or a debtor-creditor relationship.

Question

Quizplus · Accepted Answer

For a drawee to be obligated to honor a time draft, there must be an underlying account agreement or a debtor-creditor relationship between the drawee and the drawer. This establishes the legal basis for the drawee's obligation to pay the amount specified in the draft when it matures.

For a Drawee to Be Obligated to Honor a Time