TeachMeFinance.com - explain check
check -- a written order instructing a thrift institution or bank to pay immediately on demand a specified amount of money from the check writer's account to the person named on the check or, if a specific person is not named, to whoever bears the check to the institution for payment.
Check -- An order for money that is on deposit with a bank,
banker, trust company or other monetary institution.
A check differs from a bill of exchange in that it is always
payable on demand and always purports to be drawn against
a deposit of funds. If the amount stated in words and the amount stated in figures
in a check do not agree the words govern. If a check
passes out of the maker's hands without having been dated
the holder may write in the space provided for the date a date
which must be the date upon which the check was received by
him but no other date. A check dated ahead is usually regarded
as a bill of exchange rather than a check. When a check is paid before the date written on it the money so paid can be recovered. A bank is not liable to the holder of a check unless and
until it accepts or certifies the check. A bank is not bound
to make partial payment on a check if the drawer has not
sufficient funds to his credit to make payment in full.
If a depositor draws several checks amounting in the aggregate
to more than he has standing to his credit the bank pays
the checks in the order of presentation without regard to dates
or numbers until the depositor's credit is exhausted. The
bank may refuse to honor checks subsequently presented. The holder of a check ordinarily may delay presentation of
it to the bank without absolving the drawer from liability. If,
however, the bank at which the check is payable fails after the
check has been outstanding for a reasonable time and the bank
at the time of its failure is in possession of funds of the drawer
sufficient to pay the check the loss falls on the holder of the
But in order to hold the indorser the check should be presented
to the bank for collection the day it is received by the
payee (the one to whom the amount of it is to be paid) it
must be presented the following day. In case the payee does
not reside in the place where is situated the bank upon which
the check is drawn the payee must transmit it for collection
not later than the hour for the closing of the last mail on the
day following the day on which he received it. A bank receiving
it for collection must forward it on the day .of its receipt.
To send it through various banks or through parties in various
places constitutes negligence if the time of presentation is
About the author
Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".
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