I've received a cheque for something I sold on eBay. After I posted it I noticed it was dated 29/02/07.
Two things wrong with this: 1. it's in the future, 2. there is no 29/02 this year.
If I try to cash this are my bank likely to accept it or will it bounce and cost me a fee?
Bank it as is. Your band won't give a fig and will give you the money. If it then bounces , sue them and you will win.
Winning the judgement and getting your money are two different things.
How did you know he plays in a band?
Trij
In message , DONNA writes
A jobsworth cashier at your bank may try not to accept it but you could make them collect it for you.
Depends on the amount of the cheque. Nobody looks at small cheques so it may not be noticed. If it is noticed then it will bounce.
Yes.
The 'non existent' date wont be a problem so long as it is presented at the drawee no sooner than 1 March 2007
In message , dave writes
What? Arent banks good for their dosh anymore?
Most banks have a teller-less option to put the cheque/paying-in slip into an envelope and posting it into a box in the bank. If you do get a jobsworth, tell them what you're going to do - if they still object, go right ahead.
Pete
Nice one Pete a totally useless answer. Either send the cheque back and ask for it to be amended or wait until March
1st to pay it in. Since the cheque is postdated I would not send out any goods until the cheque has been paid.
He's already sent the goods out. Aren't post dated cheques against bank rules or something?
They are not against 'rules' but banks dont like them because they have got to spend money looking out for them. I think some banks may have put something in their terms and conditions but there is no general ban.
A bank's T&Cs are their "rules" are they not? So it *would* be "against bank rules" would it not? :-)
What was it again about the Cheque Act? Does the fact that a cheque bears a future or indeed an impossible date (or one in the distant past longer ago than the 6 month limit banks like to "impose") actually mean anything in law? I.e. would it make a cheque not a cheque? If it does not, does it not mean the payee can require his bank to collect it and does this not place a requirement on the drawee to pay it, subject to funds being available, regardless of the date (i.e. postdating does not mean the cheque cannot be presented before the date on it)?
If the practice of postdating is against a bank's T&Cs, it presumably binds the drawer, but not the payee. So if the bank were to apply a "sanction" to this breach of T&Cs, the drawee would "fine" the drawer by making some kind of charge. But this would not affect the payee at all, would it? Or do collecting banks also like to charge customers who insist they try to collect despite mis-dating or other technical irregularities?
Section 3(4)(a) of the Bills of Exchange Act states that a cheque need not be dated at all. However 20(I) suggests the paying bank has the authority to insert a date, although it would probably be safer to return it with a reason of 'not dated'.
I've always been told that we (as our T+C say) reserve the right to pay a cheque regardless of the date on it, presumably as no one is really looking out for it. I couldnt find any reference to it but I guess there must be some kind of provision in Truncation as the date isnt one of the encoded fields.
To someone writing a cheque we'd say dont post date as we may pay anyway, and to someone paying in a post dated cheque that they should be aware that the other bank may return the item, for which they may be charged.
Ian
That looks like a bit of a contradiction. If it "need not be dated", then how can 'not dated' be a valid reason for returning it?
If there is no lawful basis for returning it, how can a charge arise? Cannot the payee then sue the drawee?
:-) I dont know a bank that bans them, I just suspect that if I were creating a new account today I would insert a clause which said 'we wont be liable for post dated cheques we dont spot'.
A future date aint a problem for the Cheques Act (dont drop your 's's in future), an 'impossible' date is different. Whilst the 31 Feb 07 is 'impossible' there are two ways this can be handled. The first is to derive the date as being the 3rd day (in this case) after the immediately prior possible date, OR I suppose it could be handled as though it was dateless, and a dateless cheque can have any suitable date inserted on it by any holder of that cheque.
Not in the Cheques Act but the Bills of Exchange Act 1882 s36(3) covers it in so far as it concerns a Bill (of which a cheque is one) which is deemed 'to have been in circulation for an unreasonable length of time. What is an unreasonable length of time for this purpose is a question of fact'. For the avoidance of doubt the clearing banks have determined a rule of thumb being 6 months.
No, it would still be a cheque. A cheque without a date is still a cheque.
No. A postdated cheque tells a bank the date before which it cant be paid. An undated cheque, whilst technically sufficient grounds to bounce it, is not enough for a drawer to claim against the drawee for paying it.
On the other hand, with regard to a post dated item, a bank could claim protection against a claim from a drawer that a post dated cheque should not have been paid before its due date if the amount of the cheque was due to the payee in any event and therefore the drawers' position had not changed. However the drawee could be liable for any consequences of its action which were to the detriment of the drawer but the circs would determine to what extent.
Thats right.
I cant see this charge being applied for the act of issuing the post dated cheque, more likely the 'fine' would occur as a result of other subsequent items being returned unpaid (with ensuring charges) or the drawer losing credit interest that would otherwise have accrued. It is these subsequent charges/claims that the T&C might cover (if I were writing them).
No, but see below.
Ha! They like to charge everybody!
Technically a collecting bank can not refuse to collect any bill that a person may present for collection, so long as they are happy as to the title of the presenter. If the person insists on a collection, and the item is returned, then any usual charge for handling an unpaid item would fall due.
In message , snipped-for-privacy@gmail.com writes
Otherwise a v.good post, but I am not sure about the 'safer' bit here with regard to a cheque. Whilst I know you are quoting from the Bills of Exchange Act, we are talking about a 'cheque' here and I think it is reasonable to assume that we are talking about a standard cheque form in which there are spaces (fields) for each essential bit of data to be inserted of which (for the purposes of this thread) only the date is omitted. The dtae is not an essential item. In such a case the drawers intention is certain all other respects and I would feel that the cheque (in view of S3(4)(a)) would not be 'wanting in any material particular' and would be entitled to be paid. There is a real risk to the drawee that returning such an item could leave it open to a claim from the drawer if returning the item was to the drawer's detriment. There isnt a 'legal' obligation on the drawer to insert a date.
Quite. Whilst the interbank agreements for the handling of rtuncated items may handle it, as far as I can see the The Deregulation (Bills of Exchange) Order 1996 (upon which I think truncation takes advantage) makes no reference to dates etc., However I will gladly be guided by more recent legislation as I know I am not bang up to date.
Sounds reasonable to me.
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