Describe the principal-agent relationship with respect to checks
What will be an ideal response?
In a principal-agent relationship, the customer is the principal and the bank is the agent. A principal-agent relationship is created if 1. the deposit is a check that a bank must collect for a customer or 2. the customer writes a check against his or her account. The bank is obligated to follow the customer's order to collect or pay the check. The rights and duties of a bank and a checking account customer are contractual. The signature card and other bank documents signed by the customer form the contract.
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