Consider the following statements about checks: I) If notice of non-payment by the drawee bank is not sent to the maker, the presumption of knowledge of insufficiency cannot arise. II) The presumption of knowledge of insufficiency does not lie when the check is presented after 90 days from the date of the check. Which is true?

Consider the following statements about checks: I) If notice of non-payment by the drawee bank is not sent to the maker, the presumption of knowledge of insufficiency cannot arise. II) The presumption of knowledge of insufficiency does not lie when the check is presented after 90 days from the date of the check. Which is true?

• A. Only I is true
• B. Only II is true
• C. Both are true
• D. Both are false

Answer: (C)

The idea being tested is how and when the court draws a presumption about the drawer’s knowledge of insufficient funds when a cheque bounces. This presumption is not automatic; it relies on proper notice and timely action. If the drawee bank does not send notice of non-payment to the maker, there is no solid basis to infer that the drawer knew there were insufficient funds at the time the cheque was issued, so the presumption of knowledge cannot arise. That keeps the focus on the procedural step of notifying the drawer about the dishonor. On the timing side, presenting the cheque after a relatively long period—specifically after 90 days from the date of the cheque—undermines the basis for that presumption. The idea is that after such a delay, the connection between the cheque and the original funds or debt is attenuated, and the presumption that the drawer knew of insufficiency is not available. In short, timely notice and timely presentation are what allow the presumption to operate; without them, or after a lengthy delay, the presumption does not apply. That’s why both statements are considered true.

The idea being tested is how and when the court draws a presumption about the drawer’s knowledge of insufficient funds when a cheque bounces. This presumption is not automatic; it relies on proper notice and timely action. If the drawee bank does not send notice of non-payment to the maker, there is no solid basis to infer that the drawer knew there were insufficient funds at the time the cheque was issued, so the presumption of knowledge cannot arise. That keeps the focus on the procedural step of notifying the drawer about the dishonor.

On the timing side, presenting the cheque after a relatively long period—specifically after 90 days from the date of the cheque—undermines the basis for that presumption. The idea is that after such a delay, the connection between the cheque and the original funds or debt is attenuated, and the presumption that the drawer knew of insufficiency is not available. In short, timely notice and timely presentation are what allow the presumption to operate; without them, or after a lengthy delay, the presumption does not apply. That’s why both statements are considered true.