I 

The case * * * involves a bank check. A check is defined as a draft payable on demand and drawn on a bank. [UCC] §3–204.***

   The case * * * arises from Petitioner’s irritation with the Bank of America’s Thumbprint Signature Program. Under the Thumbprint Signature Program, a bank requests non-customer presenters of checks over the counter to place an ‘‘inkless’’ thumbprint or fingerprint on the face of the check as part of the identification process. The program was developed, as the Court of Special Appeals informs us in its opinion in this case, by the American Bankers Association, working with the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Banks, the Office of the Comptroller of the Currency, the Federal Bureau of Investigation, and other law enforcement officials and banking trade associations across the country in response to rising instances of check fraud. [Citation.] It is undisputed that the Bank of America’s Thumbprint Signature Program uses an inkless fingerprinting device that leaves no ink stains or residue.

II

   At some point in time prior to 3 August 2000, Petitioner, as a holder, came into possession of a check in the amount of Nine Hundred Seventy-Six Dollars ($976.00) (the check) from Toyson J. Burruss, the drawer, doing business as Prestige Auto Detail Center. Instead of depositing the check into his account at his own bank, Petitioner elected to present the check for payment at a branch of Mr. Burruss’ bank, Bank of America, the drawee. On 3 August 2000, Petitioner approached a teller at Bank of America’s 10 Light Street Banking Center in Baltimore City and asked to cash the check. The teller, by use of a computer, confirmed the availability of funds on deposit, and placed the check into the computer’s printer slot. The computer stamped certain data on the back of the check, including the time, date, amount of the check, account number, and teller number. The computer also effected a hold on the amount of $976.00 in the customer’s account. The teller gave the check back to the Petitioner, who indorsed it. The teller then asked for Petitioner’s identification. Petitioner presented his driver’s license and a major credit card. The teller took the indorsed check from Petitioner and manually inscribed the driver’s license information and certain credit card information on the back of the check.

   At some point during the transaction, the teller counted out $976.00 in cash from her drawer in anticipation of completing the transaction. She asked if the Petitioner was a customer of Bank of America. The Petitioner stated that he was not. The teller returned the check to Petitioner and requested, consistent with bank policy when cashing checks for non-customers, that Petitioner place his thumbprint on the check. Petitioner refused and the teller informed him that she would be unable to complete the transaction without his thumbprint.

   * * * After some additional exchanges, Petitioner left the bank with the check in his possession. The branch manager advised the teller that Petitioner had left the bank with his check. In response, the teller released the hold on the customer’s funds, voided the transaction in the computer, and placed the cash back in her teller drawer. 

   Rather than take the check to his own bank and deposit it there, or returning it to Burruss, the drawer, as dishonored and demanding payment, Petitioner, two months later, on 10 October 2000, filed a declaratory judgment action against Bank of America (the Bank) in the Circuit Court for Baltimore City. Petitioner claimed that the Bank had violated the Maryland Uniform Commercial Code (UCC) and had violated his personal privacy when the teller asked Petitioner to place an ‘‘inkless’’ thumbprint on the face of the check at issue. * * *

   On 15 November 2000, the Bank filed * * * for Summary Judgment. Petitioner opposed the Bank’s Motion and filed a ‘‘cross’’ Motion for Summary Judgment. After the Circuit Court heard oral arguments on the pending motions, it * * * entered summary judgment in favor of the Bank, dismissing the Complaint with prejudice. 

   Petitioner appealed on 17 January 2001. The Court of Special Appeals concluded that the Circuit Court’s decision in favor of the Bank was legally correct, * * *.

   Petitioner petitioned this Court for a writ of certiorari. On 10 June 2002, we granted the petition. [Citation.]

                     ***
    Acceptance under §3–409(a).
                     ***

   Under the UCC, a check is simply an order to the drawee bank to pay the sum stated, signed by the makers and payable on demand. Receipt of a check does not, however, give the recipient a right against the bank. The recipient may present the check, but if the drawee bank refuses to honor it, the recipient has no recourse against the drawee.

  ***

   Absent a special relationship, a non-customer has no claim against a bank for refusing to honor a presented check. [Citation.] * * * It is also well settled that a check does not operate as an assignment of funds on deposit, [citation], and the bank only becomes obligated upon acceptance of the instrument. * * *

   Once a bank accepts a check, under §3–409, it is obliged to pay on the check under §3–413. Thus, the relevant question in terms of any rights Petitioner had against the Bank turns not on the reasonableness of the thumbprint identification, but rather upon whether the Bank accepted the check when presented as defined by §3–409. As will be seen infra, the question of the thumbprint identification is relevant only to the issue of whether the Bank’s refusal to pay the instrument constituted dishonor under §3–502, a determination which has no impact in terms of any duty allegedly owed by the Bank to the Petitioner.

   Respondent Bank of America argues that the intermediate appellate court correctly found that it did not ‘‘accept’’ the check as that term is defined in §3–409(a). [Citation.] We agree. The mere fact that the teller’s computer printed information on the back of the check does not, as Petitioner contends, amount by itself to an acceptance. * * *

   The statute [UCC] clearly states that acceptance becomes effective when the presenter is notified of that fact. The facts demonstrate that at no time did the teller notify Petitioner that the Bank would pay on the check. Rather, the facts show that: 

The check was given back to [Petitioner] by the teller so that he could put his thumbprint signature on it, not to notify or give him rights on the purported acceptance. After appellant declined to put his thumbprint signature on the check, he was informed by both the teller and the branch manager that it was against bank policy to honor the check without a thumbprint signature. Indignant, [Petitioner] walked out of the bank with the check.

   As the intermediate appellate court correctly pointed out, the negotiation of the check is in the nature of a contract, and there can be no agreement until notice of acceptance is received. [Citation.] As a result, there was never acceptance as defined by §3–409(a), and thus the Bank, pursuant to §3–408 never was obligated to pay the check under §3– 413(a). Thus, the answer to Petitioner’s second question presented is ‘‘no.’’

                                ***
‘‘Reasonable Identification’’ under §3–501(b)(2)(ii)
                and ‘‘Dishonor’’ under §3–502

We now turn to the issue of whether the Bank’s refusal to accept the check as presented constituted dishonor under §3–501 and §3–502 as Petitioner contends. Petitioner’s argument that Bank of America dishonored the check under §3–502(d) fails because that section applies to dishonor of an accepted draft. We have determined * * * that Bank of America never accepted the draft. Nevertheless, the question remains as to whether Bank of America dishonored the draft under §3–502(b), * * *.

   The question is whether requiring a thumbprint constitutes a request for ‘‘reasonable identification’’ under §3–501(b)(2)(ii). If it is ‘‘reasonable,’’ then under §3– 501(b)(3)(ii) the refusal of the Bank to accept the check from Petitioner did not constitute dishonor. If, however, requiring a thumbprint is not ‘‘reasonable’’ under §3– 501(b)(2)(ii), then the refusal to accept the check may constitute dishonor under §3–502(b)(2). The issue of dishonor is arguably relevant because Petitioner has no cause of action against any party, including the drawer, until the check is dishonored. [Citation.] 

   Respondent Bank of America argues that its relationship with its customer is contractual, [citation] and that in this case, its contract with its customer, the drawer, authorizes the Bank’s use of the Thumbprint Signature Program as a reasonable form of identification. * * *

   According to Respondent, this contractual agreement allowed it to refuse to accept the check, without dishonoring it pursuant to §3–501(b)(3)(ii), because the Bank’s refusal was based upon the presentment failing to comply with ‘‘an agreement of the parties.’’ The intermediate appellate court agreed. [Citation.] We, however, do not.

   The reason why the Bank’s contract with its customer is not controlling on the issue of the reasonableness of requiring a thumbprint as identification is because the terms of §3–501 are not modified by the terms of that contract. The terms of §3–501(b) require an ‘‘agreement of the parties.’’ The term ‘‘parties’’ does not refer to the parties of the Deposit Agreement, but rather, according to §3–103(a), refers to the parties to an instrument. While Petitioner is a party to the instrument, he is not a party to the Deposit Agreement, nor may he be deemed properly a third party beneficiary thereof. To be effective against the Petitioner, Messing, as the party entitled to enforce the instrument, would have to have been a party to the agreement. §3–117. Thus, while the Deposit Agreement protects the Bank from a suit for wrongful dishonor brought by its customer, the drawer, as a result of the Bank’s potential dishonor of the check because the Bank’s demand for a thumbprint was not met, [§4– 402], the contract has no impact on the determination of the ‘‘reasonableness’’ of the requirement for purposes of §3– 501(b), and subsequently whether the instrument was dishonored for purposes of §3–502(b)(2). In other words, the Bank and its customer cannot through their contract define the meaning of the term ‘‘reasonable’’ and impose it upon parties who are not in privity with that contract. Whether requiring a thumbprint constitutes ‘‘reasonable identification’’ within the meaning of §3–501(b)(2)(ii) is therefore a broader policy consideration, and not, as argued in this case, simply a matter of contract. * * * This also means that the Bank cannot rely on the contract as a defense against the Petitioner, on the facts presented here, to say that it did not dishonor the check.

   Petitioner, as noted, argues that requiring a thumbprint violates his privacy, and further argues that a thumbprint is not a reasonable form of identification because it does not prove contemporaneously the identity of an over the counter presenter at the time presentment is made. According to Petitioner, the purpose of requiring ‘‘reasonable identification’’ is to allow the drawee bank to determine that the presenter is the proper person to be paid on the instrument. Because a thumbprint does not provide that information at the time presentment and payment are made, Petitioner argues that a thumbprint cannot be read to fall within the meaning of ‘‘reasonable identification’’ for the purposes of §3–501(b)(2)(ii). 

   Bank of America argues that the requirement of a thumbprint has been upheld, in other non-criminal circumstances, not to be an invasion of privacy, and is a reasonable and necessary industry response to the growing problem of check fraud. The intermediate appellate court agreed, pointing out that the form of identification was not defined by the statute, but that the Code itself recognized a thumbprint as a form of signature, §1–201(39), and observing that requiring thumbprint or fingerprint identification has been found to be reasonable and not to violate privacy rights in a number of non-criminal contexts. * * *

   More compelling in terms of determining the issue of ‘‘reasonableness’’ is the reasoning of the intermediate appellate court in rejecting Petitioner’s argument that §3– 501(b)(2)(ii) implicitly contains a present tense temporal element, stating: 

We agree with [Petitioner] that a thumbprint cannot be used, in most instances, to confirm the identity of a non-account checkholder at the time that the check is presented for cashing, as his or her thumbprint is usually not on file with the drawee at that time. We disagree, however, with [Petitioner’s] conclusion that a thumbprint signature is therefore not ‘‘reasonable identification’’ for purposes of §3–501(b)(2).

   Nowhere does the language of §3–501(b)(2) suggest that ‘‘reasonable identification’’ is limited to information [Respondent] can authenticate at the time presentment is made. Rather, all that is required is that the ‘‘person making presentment must * * * give reasonable identification.’’ §3– 501(b)(2). While providing a thumbprint signature does not necessarily confirm identification of the checkholder at presentment—unless of course the drawee bank has a duplicate thumbprint signature on file—it does assist in the identification of the checkholder should the check later prove to who might otherwise attempt to pass a bad check. That one method provides identification at the time of presentment and the other identification after the check may have been honored, does not prevent the latter from being ‘‘reasonable identification’’ for purposes of §3–501(b)(2).

   [Citation.] We agree, and find this conclusion to be compelled, in fact, by our State’s Commercial Law Article.

   The reason has to do with warranties. The transfer of a check for consideration creates both transfer warranties (§3– 416 (a)–(c)) and presentment warranties (§3–417(a)–(e)) which cannot be disclaimed. The warranties include, for example, that the payee is entitled to enforce the instrument and that there are no alterations on the check. The risk to banks is that these contractual warranties may be breached, exposing the accepting bank to a loss because the bank paid over the counter on an item which was not properly payable. See §4–401. [Citation.] In such an event, the bank would then incur the expense to find the presenter, to demand repayment, and legal expenses to pursue the presenter for breach of his warranties.

   In short, when a bank cashes a check over the counter, it assumes the risk that it may suffer losses for counterfeit documents, forged indorsements, or forged or altered checks. Nothing in the Commercial Law Article forces a bank to assume such risks. [Citation]; §3–408. To the extent that banks are willing to cash checks over the counter, with reasonable identification, such willingness expands and facilitates the commercial activities within the State. * * *

   Because the reduction of risk promotes the expansion of commercial practices, * * * we conclude that a bank’s requirement of a thumbprint placed upon a check presented over the counter by a non-customer is reasonable. [Citations.] As the intermediate appellate court well documented, the Thumbprint Program is part of an industry wide response to the growing threat of check fraud. [Citation.] Prohibiting banks from taking reasonable steps to protect themselves from losses could result in banks refusing to cash checks of non-customers presented over the counter at all, a result which would be counter to the direction of [the UCC].

   As a result of this conclusion, Bank of America in the present case did not dishonor the check when it refused to accept it over the counter. Under §3–501(b)(3)(ii), Bank of America ‘‘refused payment or acceptance for failure of the presentment to comply with * * * other applicable law or rule.’’ The rule not complied with by the Petitioner-presenter was §3–502(b)(2)(ii), in that he refused to give what we have determined to be reasonable identification. Therefore, there was no dishonor of the check by Bank of America’s refusal to accept it. The answer to Petitioner’s third question is therefore ‘‘no,’’ as is the answer to Petitioner’s first question, though our reasoning differs somewhat from that of the Court of Special Appeals.