Business Law-Chapter 25 Flashcards
Creditor-Debtor Relationship
A relationship that created when a customer deposits money into the bank; the customer is the creditor, and the bank is the debtor.
Article 3 of the UCC
An article of the UCC that sets forth the requirements for negotiable instruments, including checks.
Revised Article 3
A revision of Article 3 of the UCC
Article 4 of the UCC
An article of the UCC that establishes the rules and principles that regulate bank deposit and collection procedures.
Article 4A of the UCC
An article of the UCC that establishes rules regulating the creation and collection of and liability for wire transfers.
Check
An order by a drawer to the drawee bank to pay a specified sum of money from the drawer’s checking account to the named payee (or holder)
Drawer of a Check
The checking account holder and writer of a check.
Drawee of a Check
The bake where a check drawer has her account.
Payee of a Check
The party to whom a check is written.
Indorsement of a Check
A payee’s signing of the back of a check in order to turn it over to another party.
Indorser of a Check
A payee who indorses a check to another party.
Indorsee of a Check
A party to whom a check is indorsed.
Bank Check
A certified check of a cashier’s check, the payment for which a bank is solely or primarily liable.
Certification
A process in which the accepting ban writes or stamps the word certified on an ordinary check of an account holder and sets aside funds from that account to pay the check.
Certified Check
A type of check for which a bank agrees in advance (certifies) to accept the check when it is presented for payment.
Cashier’s Check
A check issued by a bank for which the customer has paid the bank the amount of the check and a fee. The bank guarantees payment of the check.
Honor
To pay a drawer’s properly drawn check.
Stale Check
A check that has been outstanding for more than six months.
Postdated Check
A check that a drawer doe not want cashed until sometime in the future.
Stop-Payment Order
An order by a drawer of a check to the payer bank not to pay or certify a check
Overdraft
The amount of money a drawer owes a bank after it has paid a check despite the drawer’s account having insufficient funds.
Wrongful Dishonor
A ituation in which there are sufficient funds in a drawer’s account to pay a properly payable check, but the bank does not do so.
Forged Instrument
A check with a forged drawer’s signature on it.
Altered Check
A check that has been altered without authorization and thus modifies the legal obligation of a party
Original Tenor
The original amount for which the drawer wrote a check.
Presentment Warranty
A guarantee in which each prior transferor warrants that a check has not been altered.
Payer Bank
The ban where the drawer has a checking account and other which a check is drawn.
Depository Bank
The bank where the payee or holder has an account.
Collecting Bank
The depository bank and other banks in the collection process (other than the payer bank)
Intermediary Bank
A bank in the collection process that is not the depository bank or the payer bank.
Electronic Funds Transfer System (EFTS)
Computer and electronic technology that makes to offer electronic payment and collection systems to bank customers. E-bankng and e-money consists of: 1. Automated teller machines. 2. Point-of-sale terminals, 3. Direct deposit and withdrawals, 4. Online Banking, 5. Debit Cards
Commercial Wire Transfer
An electronic transfer of funds from one party to another party.
