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Understanding Check Types and Parties

The document discusses various aspects of checks, including definitions and roles of the parties involved: the drawer, drawee, and payee. It explains different types of checks such as stamped orders, stale checks, post-dated checks, manager's checks, cashier's checks, and certified checks, along with their implications and legal relationships. Additionally, it highlights the bank's responsibilities in verifying the identity of the payee to prevent fraud.

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JM Army
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3 views1 page

Understanding Check Types and Parties

The document discusses various aspects of checks, including definitions and roles of the parties involved: the drawer, drawee, and payee. It explains different types of checks such as stamped orders, stale checks, post-dated checks, manager's checks, cashier's checks, and certified checks, along with their implications and legal relationships. Additionally, it highlights the bank's responsibilities in verifying the identity of the payee to prevent fraud.

Uploaded by

JM Army
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

AUGUST 15,2023  It cannot be cash but deposited to the payee’s

account.
TOPIC: CHECK
 Stamped order- a check that was already paid.
Parties of Check
Stale Check
1. Drawer- depositor

2. Drawee- Bank
3. Payee- in who’s the check in favor of.

“Payable to Cash”----"Payable to bearer” (anyone


whose in possession of check can encash the bank.

 You don’t have to sign or indorse.

Payable to designated person/ order of specific person.

 Indorsement plus delivery.

Payable on demand- he can demand immediately.

Post-dated check- advance issuance of check.

When drawer issues check, it is presumed that a


drawer has a sufficient funds.

Relationship of depositor and bank:

 It is not a contract of deposit but a contract of


loan.
 Payee cannot maintain a suit against the
drawee, instead to drawer. The drawer has
always have a cause of action from the payee.
 Additionally, it is to presumably for the bank to
examine the identify the identity of the payee
—to avoid forgery.
 Some losses suffered by bank under fraudulent
or deceit presentment of check. Such bank will
deduct it against the manager or cashier, who
will ultimately suffer loss.

Manager’s Check and Cashier’s Check

 Drawer is the manager’s or cashier


 Drawee- is the bank.
 Usually, they will purchase such check and
examine whether the purchases have
sufficient funds before issues such check to
buyer.

Certified Check

 Will not be dishonored by the bank, because it


has already an assignment of the funds.

Crossed Check

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