Post-Dated Checks: Why Date Them at All?

[Dr.Drake]

It is my understanding that once you sign and part with a check, it can be cashed immediately, even if you’ve post-dated it. Certainly that’s the way my bank rolls. And although they claim to honor staledating (expiration after six months) and cancelling the checks, their website has disclaimers that basically say “we’ll try, sort of, but if you ever wrote the check, it’s really your problem, dude.”

The banks also prefer not to give you the physical checks back, but to access images online.

So, given all of this, why do we date them at all? Is there any legal / accounting reason that the date on the check matters, as opposed to the date cashed? Or is it just a convenient reference, a holdover from the long-ago days when humans were hired to pay attention to such trivia?

Follow-up question: If you don’t put a date on, does it matter?

[Gfactor]

Basic rule:

§ 3-113. DATE OF INSTRUMENT.

(a) An instrument may be antedated or postdated. The date stated determines the time of payment if the instrument is payable at a fixed period after date. Except as provided in Section 4-401(c), an instrument payable on demand is not payable before the date of the instrument.

(b) If an instrument is undated, its date is the date of its issue or, in the case of an unissued instrument, the date it first comes into possession of a holder.

U.C.C. - ARTICLE 3 - NEGOTIABLE INSTRUMENTS (2002) | Uniform Commercial Code | US Law | LII / Legal Information Institute

(c) A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check, unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in Section 4-403(b) for stop-payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in Section 4-303. If a bank charges against the account of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include damages for dishonor of subsequent items under Section 4-402.

U.C.C. - ARTICLE 4 - BANK DEPOSITS AND COLLECTIONS (2002) | Uniform Commercial Code | US Law | LII / Legal Information Institute

But:

§ 4-103. VARIATION BY AGREEMENT; MEASURE OF DAMAGES; ACTION CONSTITUTING ORDINARY CARE.

(a) The effect of the provisions of this Article may be varied by agreement , but the parties to the agreement cannot disclaim a bank’s responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack or failure. However, the parties may determine by agreement the standards by which the bank’s responsibility is to be measured if those standards are not manifestly unreasonable.

(b) Federal Reserve regulations and operating circulars, clearing-house rules, and the like have the effect of agreements under subsection (a), whether or not specifically assented to by all parties interested in items handled.

(c) Action or non-action approved by this Article or pursuant to Federal Reserve regulations or operating circulars is the exercise of ordinary care and, in the absence of special instructions, action or non-action consistent with clearing-house rules and the like or with a general banking usage not disapproved by this Article, is prima facie the exercise of ordinary care.

(d) The specification or approval of certain procedures by this Article is not disapproval of other procedures that may be reasonable under the circumstances.

(e) The measure of damages for failure to exercise ordinary care in handling an item is the amount of the item reduced by an amount that could not have been realized by the exercise of ordinary care. If there is also bad faith it includes any other damages the party suffered as a proximate consequence.

U.C.C. - ARTICLE 4 - BANK DEPOSITS AND COLLECTIONS (2002) | Uniform Commercial Code | US Law | LII / Legal Information Institute

There are special rules for lenders who accept postdated checks as security for loans (mostly payday loans) and also some rules about collection agencies getting a debtor to write them postdated checks.

As you can see, in some very limited circumstances, the bank might be liable for paying a postdated check before its time, but mainly the only significance is that you might be able to establish an agreement not to present the check until the date between the payor and the payee.

[Desert_Nomad]

In Dubai where I lived for 3 years, banks absolutely honor cheque dates. Many things (esp. rent) are paid by post-dated cheques.

[Gfactor]

Another potential complication:

§ 3-115. INCOMPLETE INSTRUMENT.

(a) “Incomplete instrument” means a signed writing, whether or not issued by the signer, the contents of which show at the time of signing that it is incomplete but that the signer intended it to be completed by the addition of words or numbers.

(b) Subject to subsection (c), if an incomplete instrument is an instrument under Section 3-104, it may be enforced according to its terms if it is not completed, or according to its terms as augmented by completion. If an incomplete instrument is not an instrument under Section 3-104, but, after completion, the requirements of Section 3-104 are met, the instrument may be enforced according to its terms as augmented by completion.

(c) If words or numbers are added to an incomplete instrument without authority of the signer, there is an alteration of the incomplete instrument under Section 3-407.

(d) The burden of establishing that words or numbers were added to an incomplete instrument without authority of the signer is on the person asserting the lack of authority.

U.C.C. - ARTICLE 3 - NEGOTIABLE INSTRUMENTS (2002)

[Keeve]

If I give you a check dated Feb 10, for example, the bank rules (in the USA) do allow you to deposit it immediately, and they will honor it, as you say.

But if I am low on cash today, and I do expect to have enough in my account by Feb 9, and you are a nice person who is willing to hold the check until then, — then the date on the check serves the function of reminding you about our agreement, and when it’ll be okay for you to deposit it.

[Dr.Drake]

Thanks for the replies, esp. Gfactor. So if I understand the answers correctly:

1. We still date checks because, (1a) occasionally, if we have made specific prior arrangements, the date does have a function and (1b) if we do not write the date, there is a potential complication that the check might be understood to be an “incomplete instrument.”

2. But it’s mostly a combination of history, habit, and convenience, and not crucial like the payee, amount, and signature.

[Gfactor]

All that, and I’ll add the bank might have contractual provisions or policies that make it very inconvenient for the payee to cash the check if it is undated, despite the UCC’s provisions.

[Gfactor]

Here’s a previous check-related thread: Can I write a Check on Anything I like?

[Keeve]

@Dr. Drake

Thanks for the replies, esp. Gfactor. So if I understand the answers correctly:

1. We still date checks because, (1a) occasionally, if we have made specific prior arrangements, the date does have a function and (1b) if we do not write the date, there is a potential complication that the check might be understood to be an “incomplete instrument.”

2. But it’s mostly a combination of history, habit, and convenience, and not crucial like the payee, amount, and signature.

Those answers explain why we put a date on checks in general. But wasn’t your original question specifically about why we put a date on post-dated checks? Did I misunderstand the question?

[Dr.Drake]

@Keeve

Those answers explain why we put a date on checks in general. But wasn’t your original question specifically about why we put a date on post-dated checks? Did I misunderstand the question?

I think I asked the question badly (as usual). What I meant was, “post-dated checks got me thinking…” and then onto the question.

[Cillasi]

Whether a post-date is accepted used to be dependent on what kind of account the check was drawn against. It may or may not still work the same since there are many different types of accounts against which you can write checks (or drafts) today.

A regular checking account (in the United States) is a demand deposit account; the checks you write are payable “on demand” and, in general, you cannot post-date checks against a regular checking account. You can ask the payee to hold the check until a set date, but if it gets deposited anyway, you can expect your bank to honor it when presented, post-date or not.

@Dr. Drake

Thanks for the replies, esp. Gfactor. So if I understand the answers correctly:

1. We still date checks because, (1a) occasionally, if we have made specific prior arrangements, the date does have a function and (1b) if we do not write the date, there is a potential complication that the check might be understood to be an “incomplete instrument.”

2. But it’s mostly a combination of history, habit, and convenience, and not crucial like the payee, amount, and signature.

[whatami]

@Dr. Drake

snip…
The banks also prefer not to give you the physical checks back, but to access images online.

The original checks should now be destroyed by the bank who pays them out. Instead, banks can provide you with a"substitute check" (images of both sides). This is part of the Check 21 Act

[RickJay]

I recently visited a customer who had lost some $250,000 to a dishonest employee. The employee had taken a book of company checks, written amounts on them, and deposited them in an ATM.

The first few she had signed with the name of the company’s president, but after awhile she stopped bothering with that. Some were not signed at all. Some were not dated. (She was also intercepting the statements so as to hide her theft, which is how so many were cashed.)

Out of some 150 checks, possibly as many as 200, the bank honored every single one. Checks that were not signed by the person with signing authority, and some checks that were not signed at all. Not one, not one single check, was inspected for its authenticity. The problem was discovered only when one of the checks was discovered in her car by accident.

I don’t trust my bank anymore when it comes to checks.

[Flipshod]

Let me add that dating checks also makes the whole financial paper trail much easier to follow–this is mostly important for businesses who are regularly subject to internal and external audits of their financial statements. For individuals, the same holds true for preserving tax records