Business Law question: Sarah draws a check on her account at Bank of America, payable to...

Business Law question:

Sarah draws a check on her account at Bank of America, payable to Trees R US.

a. She postdates the check by 15 days. Does this affect the negotiability? Explain.

b . Identify the drawer, the drawee and payee.

Expert Solution

Here,the Cheque being drawn by sarah is a negotiable instrument as it facilitates the payment of a certain amount to a person named in that document or instrument.Negotiability is that characteristic of an instrument or document that allows the free and legal transfer of ownership from one person to the other.

a.Here as per the question the cheque is postdated,it means that the cheque is being issued or drawn today or the above mentioned day but the amount can only be withdrawn using cheque on or after the date mentioned in the cheque i.e.after 15 days of the date of the issue.

Hence as per me,this affects the negotiability from the point of view of time because the ownership of the fund/amount cannot be changed on the day of issue of cheque.It can only be transferred after 15 days of issue of cheque.

b. Here 'Sarah' is the drawer,'Bank of America' is the drawee and the Tree R US is the payee.

Rahul Sunny answered 1 year ago

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