Dishonor Law and Legal Definition

The plain meaning of dishonor is disgrace, or loss of honor or reputation. In terms of commercial law, dishonor means refusal to pay or accept a draft or a check or the amount due on a promissory note, by the party on whom it is drawn, if the check writer’s account has insufficient funds. Unless the drawee, that is, the party directed to pay the amount of draft or a check gives proper notice by returning the check the same day, the endorser’s liability is voided. To dishonor is to neglect to pay it at maturity.

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