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Simple English definitions for legal terms
wrongful dishonor
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A quick definition of wrongful dishonor:
Wrongful Dishonor: When someone refuses to accept or pay a check or other type of payment that is supposed to be paid, even though it was presented correctly and should have been paid. This is different from just regular dishonor, which is when a payment is not accepted or paid for a valid reason.
A more thorough explanation:
Definition: Wrongful dishonor is when someone refuses to accept or pay a negotiable instrument (like a check or promissory note) that is properly presented and payable. This is different from regular dishonor, which is when a negotiable instrument is not paid because of a legitimate reason, like insufficient funds.
Example: Let's say you have a check for $500 from a friend, and you go to their bank to cash it. The bank tells you that they won't cash the check because your friend's account has been closed. This is a legitimate reason for dishonor, and the bank is not at fault.
However, if you have a check for $500 from a friend, and you go to their bank to cash it, but the bank refuses to cash it for no reason, this is wrongful dishonor. The bank has no legitimate reason to refuse the payment, and they are at fault.
Another example: A business owner receives a promissory note from a customer for payment of services rendered. When the business owner presents the promissory note for payment, the customer refuses to pay without any valid reason. This is an example of wrongful dishonor.