USA COMMERCIAL LAW

USA Commercial Law

USA Commercial Law

Question one

Adam signed a check in the amount of USD $500 drawn on his account at Octopus National Bank (ONB) payable to the order of “Bill and Betty” to pay them for cleaning his large house. A few days later, Bill purchased an antique camera from USA.

Dan and gave Dan the $500 check as payment for the camera. Bill indorsed the check as follows, “Pay to Dan” and then signed his name. Betty did not indorse the check.

Dan deposited the check into his account at Calamari State Bank (CSB). CSB credited Dan's account and forwarded the check to ONB for collection. ONB refused to honor the check and returned it to CSB. CSB then debited Dan's account for USD $500 and returned the check to Dan.

A. Did ONB properly refuses to honor the check? Why or why not? Explain your answer.

ONB should refuse to honor the check as Bill should have to indorsed the check with his own account title.

B. Did CSB properly debit Dan's account for USD $500? Why or why not? Explain your answer.

CSB should debit Dan's account as they credit Dan's account and then forwarded the check to ONB for collection(Lookofsky, 2008).

C. What are Dan's rights, if any, against Bill? Explain your answer.

Bill should have to pay USD $500 to Dan's directly instead of paying him through check which indorsed as “Pay to Dan” (Bae, 2008).

D. What are Dan's rights, if any, against Betty? Explain your answer.

Betty did not indorse the check which is Betty fault and Dan suffers for it.

E. What are Dan's rights, if any, against Adam? Explain your answer.

Adam should have to pay Bill and Betty separate check for cleaning his large house.

Question two

Stan owed Julia USD $42,500 for the purchase of equipment for Stan's business. Stan gave ...