We are going to return to the story about John Teller and Chen Dawei and the sal

Question

We are going to return to the story about John Teller and Chen Dawei and the sale of the motorcycle. Almost everything about the story is the same. However, we are going to change the story a little in a few ways. First, let's change the written contract a little. This time, let's assume that the contract is written in US dollars ($8,350) and that Teller wants to be paid the easy way-he wants a check that will clear his bank quickly. He is not sophisticated and does not feel comfortable with a wire transfer. +' Fortunately, Chen has that cousin who lives in Tulsa (a big city-or at least, big by Oklahoma standards-in Oklahoma, about 150 kilometers from Shawnee). The cousin's name is Xu Jintao but in the U.S. he uses the name Jim Shu. He owns a restaurant in Tulsa, called the "Shanghai Palace." Chen will send Jim Shu the money by wire transfer, and Jim will write the check. +' Teller and Chen's written agreement, in this version of the story, stated:+ "John Teller agrees to sell to Chen Dawei the motorcycle advertised on Craigslist for S8,350, CIF dockside Seattle. Teller will arrange delivery upon receipt of payment."'

Explanation / Answer

Solution 9

Check refers to the instrument which represents an unconditional order in writing sign by the person that has parted his money with the bank addressing the banker asking the bank to make payment of amount mentioned on the instrument on demand only to person whose name is mentioned on the instrument or to the person that holds the instrument.

The check does not stand to be valid draft as the actual name of the person that has drafted the check is XU Jintao. However the check was signed with the name Jim Shu which is merely the name used by XU Jintao in USA but it does not mean that he can sign the check with his second name. An individual is able to open an account in the bank with his identity proof and for all legal purpose the actual name of the person that has drafted the check is Xu Jintao. Hence, it can be concluded that the check does not stand to be valid nor the signature used for signing the instrument.

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