Question

John writes out a check for $100 on his account at the Sacred Heart Bank to repay the $100 he owes Perry. He gives the check to Eliot and tells her to hand it over to Perry. However, Eliot loses the check before she can hand it to Perry. Later, John realizes that he had not written Perry's name on the lost check. According to the provisions of the UCC, the risk of loss of the check should be placed on ________.

Answer 1

Answer:

Eliot

Explanation:

From the illustration, Eliot has confirmed the receipt of the check. The implication is that John has transferred the risk of holding and/or safeguarding the check to Eliot. Hence, Eliot has the duty and care to ensure the proper handling of the check. That the check got lost while in her care further confirms the risk is on her. And the non written of Perry's name on the lost check doesn't take away the risk from Eliot. This viewpoint is also in line with the provisions of the UCC.