Fact Pattern 24-1Lisa writes a check on her account at Metro Bank to Niklas to pay a debt. Niklas negotiates the check by indorsement to O'Leary, who presents it for payment to Prime Bank.
-Refer to Fact Pattern 24-1.If Prime Bank dishonors the check,O'Leary can obtain payment from Niklas
A) if O'Leary timely notifies Niklas.
B) only if Lisa refuses to pay the check.
C) only to the extent that Lisa overpaid her debt to Niklas.
D) under no circumstances.

Question

Fact Pattern 24-1Lisa writes a check on her account at Metro Bank to Niklas to pay a debt. Niklas negotiates the check by indorsement to O'Leary, who presents it for payment to Prime Bank.
-Refer to Fact Pattern 24-1.If Prime Bank dishonors the check,O'Leary can obtain payment from Niklas 
A) ​if O'Leary timely notifies Niklas. 
B) ​only if Lisa refuses to pay the check. 
C) ​only to the extent that Lisa overpaid her debt to Niklas. 
D) ​under no circumstances.

Quizplus · Accepted Answer

O'Leary can obtain payment from Niklas if they timely notify him of the dishonor of the check, as stated in the Uniform Commercial Code (UCC) Section 3-309. O'Leary's ability to obtain payment from Lisa or whether or not she overpaid her debt to Niklas is irrelevant in this situation.

Fact Pattern 24-1Lisa Writes a Check on Her Account at Metro