Cheque

cheque meaning

A cheque is a written order addressed by a person (the drawer) to a banker to pay money, generally to some third party (the payee). A check is a form of bill of exchange in which one party instructs the bank to transfer money to the bank account of another party. This can only be done when both parties have bank accounts. The Negotiable Instruments Act of 1881 applies to it since it is a tradable item that may be bought and sold.

Properties of a cheque

To be valid, a cheque must be issued by the account holder, written on a bank's cheque book, have a certain date, contain the amount in numbers and written words, and signed by the account holder. Cheques are negotiable, which means that they can be transferred from one person to another by endorsement on the back or signed over to a third party. The transferability of a cheque makes it a popular and convenient mode of payment in business transactions. Finally, the bank guarantees payment of the cheque to the holder, and the funds are transferred from the account of the issuer to the account of the payee when the cheque is presented for payment.

Nature of a cheque

A cheque is a negotiable instrument that is commonly used as a method of payment. It is a written order from the account holder to their bank to pay a specified amount of money to the named recipient on the cheque. In essence, a cheque is a promise by the account holder to pay the sum to the holder of the cheque on demand. Cheques in the UK are governed by a number of laws and regulations, including the Bills of Exchange Act 1882 and the Cheques Acts 1957 and 1992. These laws address various aspects of the cheque, including its issuance, payment, acceptance, and dishonour. Overall, a cheque is an important tool for commerce and has legal significance in the UK as a form of payment.

Law Books

We at Law Tutor thrive to be leaders in private law tutoring and legal education for all law courses. Use Law Tutor's law books for the LLB degree, PGDL and other legal courses. Law Tutor is a former university law lecturer and barrister.