enforced only by all of them. If an instrument payable to two or
more persons is ambiguous as to whether it is payable to the persons
alternatively, the instrument is payable to the persons alternatively.
In another example, if a check is made payable to the order of "John
Doe or Pete Smith," the "or" makes this check payable
alternatively and either John or Pete can negotiate the check on
his own. If the check is made payable to "John Doe and Pete
Smith,” the "and" makes the check payable not alternatively
and John and Pete must act together in order to negotiate the check.
If the check is made payable in such a way that you can't be sure
whether it is payable alternatively or not (it's ambiguous), the
last sentence of § 41-03-10(4) allows you to treat the check
as if it were payable alternatively. For example, if the check is
payable to "John Doe and/or Pete Smith," you are authorized
to treat the check as payable alternatively and either John or Pete
can negotiate the check on his own.
We have a customer with severe arthritis who has taken
to signing her checks with an “x” We sympathize with
her plight, and so far we have accepted these checks without a word.
We wonder if this is entirely prudent. Can customers sign checks
from their deposit accounts with an "x?"
Answer: Yes, they may sign with a mere “x.”.
N.D.C.C. § 41-03-38(2) (UCC § 3-401(b) provides that:
“A signature may be made manually or by means of a device
or machine and by the use of any name, including any trade or assumed
name, or by any word, mark, or symbol executed or adopted by a person
with present intention to authenticate a writing.”
In this case, a financial institution may want to take steps to
protect against the increased likelihood of a forgery going undetected.
For example, you may want to consider an authorization in which
you have the customer grant the institution the authority to honor
checks signed solely with an “x.” {Of course, this should
be done in the presence of a notary since the customer will be signing
the authorization with an “x.”}
Also, just for your information, the Official Comments to UCC §
3-401 state that a signature may be “made by a mark or even
thumb print.” That being said, a financial institution or
other entity may
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still require
proof of identification from one using a non-typical signature.
Does a notation or writing stating "paid in full"
on a check affect how it's processed?
Answer: No. Briefly, if the drawer or indorser puts “paid
in full”on a check, the drawer or indorser is attempting to
settle a debt with the person who is receiving the check. N.D.C.C.
§ 41-03-37 (UCC § 3-311) says that if the drawer or indorser
meets certain conditions, then putting this sort of language on the
check is effective and the underlying debt is "discharged."
The person receiving the check has some options under these rules
as well.
This language does not affect the paying bank or any collecting bank
in any way, as these institutions have no way of knowing whether the
debt is paid in full or not. Their responsibility is to follow their
customers' instructions and pay the check.
What is the difference between Regulation P and the Gramm-Leach-Bliley-Act?
Answer: In a nutshell, the Gramm-Leach Bliley Act is a federal
law that contains, among other provisions, Title V, Subtitle A covering
the "Disclosure of Nonpublic Personal Information.” The
privacy regulation (Regulation P) enacts Gramm-Leach Bliley. Together
the two focus on an institution's privacy policies and practices and
require notices to be given to consumers and customers. The relationship
between the two is like that between the Truth in Lending Act and
Regulation Z - the first is the law and the second is the regulation
that enacts the law.
I have recently heard mention of a"Waiver of Interest"
form. What is this used for?
Answer: A Waiver of Interest is typically used in situations
when the lender places value on a guarantor's jointly-held assets,
but the guarantor's spouse does not guaranty the borrower's obligations.
The Waiver of Interest provides that the non-guarantying spouse waives
his or her claims to the jointly-held assets in the event the lender
obtains a security interest or judgment.
We intend to obtain a guaranty from a sole proprietorship
doing business as. Should the d/b/a or the individual owner's name
be used?
Answer: The individual owner's name should be used, since
a d/b/a is not a legally-recognized entity like a corporation. The
d/b/a may be used in addition to the individual's name, but it should
never be used instead of the individual's name.
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