Check Payments, Drafts and Certificate of Deposits - Assignment Example

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The paper "Analysis of Article Related to Check Payments, Drafts and Certificate of Deposits" discusses that the Fourth Article of UCC that is about the applicability of banking in business transactions. It clarifies the roles and responsibilities of the bank and its relationship with its customers…
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Check Payments, Drafts and Certificate of Deposits
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Law UCC Essay and Multiple Q&A
Commonly mentioned for the specification of negotiable instruments, Article 3of the UCC is detailed for check payments as in payments, drafts and certificate of deposits. It states the assurance to the payee of a secured payment of any sales or commercial transactions. This Article also states the unconditional provisions of promises or contract between payee and payor. It also deals with different conditions, issues of delivery, payability, unconditional promises or order, legalities concerning identification of bearer and liquidity of the instrument and specific legal matters. This Article is regulatory in function both protecting the payee and signee of the order/payor (Cornell University Law School, 2005).
Because Article 3 deals directly with the definition of payments and how it is coursed through from institutional bodies such as banks to the payee, specific terms and conditions apply to its sections. I have observed that portions of sections in this Article is clear and simple to follow. One such illustration is Section 3-114 wherein terms on an instrument are made understandable as guidelines to settle contradictions. I perceive that written words representing numerical values are likely than written numbers. Hand writing is most valued than typewritten documents while printed papers are the least utilized in filling up an instrument. One reason for all these is that specific presentation of values, such as spelling, and handwriting offers a proof of participation of the instrument’s signee in the payment system.
The Fourth Article of UCC is about the applicability of banking in business transactions. It clarifies the roles and responsibilities of the bank and its relationship with its customers. Bank responsibilities, in legal terms with respect to an item for the purpose of payment, presentment or collection are governed by law of the place where the bank is (Cornell University Law School, 2005). With the former Article which centralizes payment, roles and responsibilities of payee and payor, this portion of UCC is concentrated on the roles of the bank. However, specific sections call for greater understanding of this law. One example is Art. 4-102 (a) where it states that “items within this Article [4] are also within Articles 3 and 8, they are subject to those Articles.   If there is conflict, this Article governs Article 3, but Article 8 governs this Article.” (Cornell Law University, 2005). There is overlapping of statements of Articles 4, 3 and 8, which shares the same topic. These terms are included to provide for the relationship of bank and customer according to the presiding bank law in the area. If this violates a specific existing guideline on banking, Articles 3 and 8, automatically governs the transaction.
Another example of overlapping of statements is in Article 4-106a-c. The difference between “payable thru” and “payable at” creates enormous variation in the payment process. Moreover, there are two alternative clauses with “payable at” both has different methods of payment. The payee either can receive a draft drawn on the bank or the payment which was collected from the payor. The latter process involves the bank as channel and requires the bank to collect only and is not authorized to pay. Read More
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