Failure to give notice of dishonor will discharge the drawer of a draft accepted by a nonbank from having to pay on the instrument unless notice is excused.

Question

Quizplus · Accepted Answer

The Uniform Commercial Code (UCC) requires that the holder of a draft must give notice of dishonor to the drawer in order to hold them liable for payment. If the drawer is not a bank and notice of dishonor is not given, the drawer may be discharged from payment unless there is a valid excuse for not giving notice. Therefore, the statement is true.

Failure to Give Notice of Dishonor Will Discharge the Drawer