In general, the UCC states that a drawee
bank is liable for fraud claims involving the drawer's signature on the face of a check and that a depository bank is liable for fraud claims involving the payee's endorsement on the back of the check.
Since the issuer of the check does not cede his interest in the funds to be transferred until the drawee
bank actually honors the check, there is no reason to believe that his general right to exclude has been impaired before that point.
Where a drawee
provides funds to a collecting bank on presentation of an instrument bearing a forged signature of the drawer, the drawee
will usually--unless a specific factual context dictates otherwise--be in a position to assert that it did not intend the payee to keep the funds.
Matsis seemed to confirm this view, saying that although an increasing number of cheques are being returned unpaid by banks, a drawee
will still present them once or twice more before finally considering reporting the drawer to the CIR.
A check is a special kind of draft that is payable only by a bank as drawee
and which is payable upon demand by the payee.
When concluding it, if the market price is superior to the convened price the drawee
will exercise the option.
id (expanding on the suggestion that the best practice is to make clear that there is always "a chance that any check will be dishonored" by a drawee
27) A substitute check may be created by the drawee
bank once the drawee
bank receives the electronic image of the original check from a depository bank.
If, however, that drawee
bank fails and cannot honor the check, the customer who deposited the check will not receive credit from the bank in which the deposit was made and will not be able to withdraw an equivalent amount in cash.
Drawings under the F/X swap arrangements can be initiated by either the FRBNY or the partner foreign central bank and must be agreed to by the drawee
For example, if the drawee
bank pays a check bearing a forged signature of the drawer, the drawee
bank bears the loss (White and Summers 2000, 553555).
102) The payee went to the drawee
bank and sought its acceptance of the check and payment.