Question

Doughnut Holschtein always buys his weekly groceries at Harris Teeter because the grocery store chain holds itself out as providing good customer service. This week, Doughnut tried to pay by check but the cashier would not accept it. Doughnut was outraged and complained to the manager. The manager also would not accept the check. Doughnut vowed to take his business elsewhere. Explain whether Harris Teeter had a basis for refusing to accept this check. Refer to the requirements of negotiable instruments in your explanation.

Answer 1

Any type of negotiating instrument can be seen as a form of credit as it is not the guarantee that the payment will be realized as the check is just an order to the bank to pay the certain sum of money provided that there is enough money in the account. Thus the check is not a promise that the bank will pay the amount but it is a request to the bank to pay the money provided the availability of funds in the account.

Thus check is not a legal tender for any transaction and it can be rejected by the others. Business or the creditor has the legal right to be paid in the legal tender and thus it is valid to reject the payment in any other form such as a check .

Thus in the given case, the grocery store chain has the full legal right to reject the acceptance of a check for the payment of the goods bought