Quimby writes a check to Rico on May 1 that is drawn on Quimby's ac?count at Seven Seas Bank.Rico presents the check on December 15.The bank is
A)not obligated to pay the check under any circumstances.
B)not obligated to pay the check unless Rico can show he is an HDC.
C)obligated to pay the check if there are sufficient funds in Quimby's account.
D)obligated to pay the check under any circumstances.

Question

Quizplus · Accepted Answer

Under the Uniform Commercial Code (UCC), specifically Article 3, Section 404, a bank is obligated to pay a check if there are sufficient funds in the account to cover the amount of the check, unless there is a valid defense or breach of duty on the part of the bank or the customer. In this scenario, as long as Quimby has sufficient funds in their account at the time Rico presents the check, the bank is obligated to pay it. The time frame between when the check was written and when it was presented for payment does not affect this obligation, unless there is a stop payment order in place or some other valid defense.

Quimby Writes a Check to Rico on May 1 That