A check is postdated to November 20 even though the check was written out on November 3 of the same year. The drawer provided notice to the bank of the postdated check. Which of the following is correct under the Revised Article 3 of the Uniform Commercial Code?
a. The check is payable on demand on or after November 3 because part of the definition of a check is that it be payable on demand.
b. The check ceases to be demand paper and is pay able on November 20.
c. The postdating destroys negotiability.
d. A bank that pays the check is automatically liable for early payment.
Answer:B
Under the Revised Article 3, postdating a check does not destroy negotiability but makes the check properly payable on or after the date written on the check. Although the postdated check is not properly payable before the date on the instrument, if a bank pays it earlier, it is not liable unless the drawer had notified the bank that the check was postdated.