A friend of mine at work is buying some furniture. Per the contract with the furniture store, she wrote them two post-dated checks (one for 7/00, one for 8/00). So, last Friday, she found out that the company cashed her checks, causing a LOT of her checks for bills to bounce. When she called to complain, they told her that they had every right to cash them and that writing a post-dated check is illegal. So, question #1: Is it really illegal to do that? People write me post-dated checks all the time. And #2: If it’s illegal, then can the company legally put forth a written contract that requires her to write a post-dated check?
It sure sounds like somebody is in a lot of trouble. I hope she has a copy of this contract that instructs her to break the law in order to do buisness with said company.
We cheat the other guys & pass the savings along to you!
Yes, she does have a copy. In fact, she is going to take them to small claims court to pay her back for all the fees that went along with the bounced checks. I just wanted to know if it’s really illegal.
Okay I just had to check on that. Just have a seat here next to these old copies of National Geographic and somebody will be right with you.
We cheat the other guys & pass the savings along to you!
She could also raise hell with her bank for clearing the checks. Besides going to small claims court, she may wish to inform your states secretary of state about how she was duped, since she has it in writing.
Your deep sea diving suit is ready, me brave lad.
Short answer: No, it’s not illegal to issue a postdated check.
Longer answer and qualifications: You don’t say what state you are in. State laws vary. It is possible that your state has some quirky law which would change my answer. (I practice in Illinois, and frequently deal with banking issues.)
The law of most states is very similar in this area, though, as this is governed by the Uniform Commercial Code. UCC section 3-113(a) states that “An instrument may be antedated or postdated.” (“Instrument” includes a check.)
UCC section 4-401 contains some additional nuances dealing with the relationship between the issuer of the postdated check and his/her bank. Essentially, this section says that your bank may honor a postdated check if it is presented prior to the date it bears, unless you first warn the bank that you have issued a postdated check. (This was put in the Code, as banks don’t normally look at most checks other than to electronically code them. If the bank isn’t warned, it’ll never notice that the check is postdated.)
4-401 doesn’t affect the relationship between the issuer and the payee, though. (The payee is the person who the check is payable to.)
Bottom line: The payee breached the contract, and might be liable under state consumer fraud statutes, depending on the circumstances.
Disclaimer: This response describes general legal principles and is not meant to be legal advice for your particular situation or to create an attorney-client relationship. For legal advice, you should consult an attorney in your state.
Damn! I had that exact post all typed out and ready to put into the response window. Well, I can at least include my nifty link to the Uniform Commercial Code online.
Change Your Password, Please and don’t use HTML, as it has been disabled
Okay, to respond to couple of posts:
#1: The bank told her that they did not have to check the dates on checks, and therefore it was perfectly okay to cash them as they did (I was going to ask about this in the OP as well, but I forgot).
#2: She is planning on filing a complaint with the Better Business Bureau. You think she should go to the state’s attorney’s office as well?
#3: We are in Illinois.
#4: I will let her know about your link, Manhattan.
Thanks everyone!
- Bank is right.
- try the Attorney general.
- Good. Then the version of the UCC that I used was correct.
You can put any date you want on the check & anyone can cash it whenever they want so said my bank once. sigh. They said that date issues are between the person who wrote the check & the person who cashed it.
How you going to prove they said they wouldn’t cash it till later?
so why is there a line for the date on the check? For our personal reference? That’s what the numbers are for. I’m going to quit wasting ink from now on if that’s the case. (The same thing happened to me a few years ago; I sent 2 checks to my long distance company or something and they cashed both at the same time, I was so irate!)
“I don’t know…I don’t know.” – St. DooDah
Just go burn the store to the ground.
FYI: In some countries, pre-dating direct deposit and electronic transfers, it would be common to use post-dated checks.
For instance, the monthly interest checks for a large fixed amount type of deposit account would be issued in the form of a book with cheques for the interest amount for each month but with dates printed with each month different and later in the future. The idea being to rip out the current months ‘cheque’ and deposit it into your bank.
Any check deposited before its time would be rejected routinely by the alert human employees of the bank.
Random said
and
I followed Manny’s link to the UCC and read both sections (3-113 and 4-401). I could not find anything that addresses the payee’s concerns. Imagine, if you will, the following scenario:
I walk up to the counter of my local Widget-world and plunk down a few hundred clams worth of Widgets. I write a check and subtly write ‘09’ rather than ‘00’. Not too farfetched, just a smallish extra little line. The clerk does not notice and I walk out of there with a bag of fun. I then make a beeline for my bank (or my phone, rather, I am a might bit too embarrassed to see my teller face-to-face) and tell them to look out for check number so-and-so for such-and-such amount dated for the year 2009.
What could the store do? They accepted a check for 2009. Sure, common sense would say I owe them a few smackers, but would they have any legal recourse?
What if I wrote 100.00 in the numbers section of the check but ‘one dollars’ in the writing part? Any idea as to which one takes precedence?
Wasn’t there some guy who got a promotional check in the mail, one of those “This is what your check will look like if you are chosen as the Grand Prize Winner” things, and he cashed it and actually got the money?
I know this isn’t exactly on subject but since were talking about legal checks…
The vendor accepted your check in good faith. You received the merchandise and so have a legal debt to the vendor. Your basic choices would be:
- Let the bank pay the check. All’s well.
- Instruct the bank not to pay the check, and subject yourself to prosecution from the vendor for theft.
The situation would be the same if you ordered a stop payment on the check. If you owe the money and don’t pay, the vendor can prosecute.
The written amount is the “legal” amount.
Yes, kind of. IIRC, he deposited the check through an ATM, withdrew the cash from his account before the bank caught the error, converted the cash to an official check, and held it in a safe deposit box while he toyed with the bank. To be fair, the bank screwed up several times and did not handle the recovery process well, but the money never legally belonged to the guy (can’t remember his name) and he eventually returned it to the bank. He used to have a web site up describing the whole affair. I remember it being an entertaining read.
The overwhelming majority of people have more than the average (mean) number of legs. – E. Grebenik
Two different states have very different laws:
In Virginia, it’s illegal to post-date checks. However, in New York, it’s illegal to try to cash a post-dated check.
I found this out when buying a time-share. The property was in Williamsburg, VA. The salesguy said he could take post-dated checks for the down payment. I mentioned that PD checks were illegal. But he said that since they were based in NY (and that all the paperwork was going to be processed there), it was OK and that they couldn’t cash them sooner than what I had dated them.
(It was all moot, since my wife and I cancelled the whole deal the following Monday. :D)
Wrong thinking is punished, right thinking is just as swiftly rewarded. You’ll find it an effective combination.
Avenue B Dude - yes. He has a website which, when I have a few minutes, will try to find. It details the whole thing.
And a “Date Doesn’t Matter” story:
Last year, my wife and I were watching the Superbowl at home. We ordered a Domino’s Pizza, and I paid by check.
I write my dates on checks DD-MON-YY. As I wrote the check, I put the day of the month, 31. Then I thought, “Whoa, it’s almost February!” I then wrote “Feb”, then the year, “99”.
Two days later, that check dated “31-Feb-99” was cashed with no problems.
Wrong thinking is punished, right thinking is just as swiftly rewarded. You’ll find it an effective combination.
quote:
What if I wrote 100.00 in the numbers section of the check but ‘one dollars’ in the writing part? Any idea as to which one takes precedence?
The written amount is the “legal” amount.
end quote.
Actually, this happened to my father… he deposited a check for about $1500 - the written amount was “one thousand five hundred dollars”, but the number in the box was $1500 - not $1500.00
The bank’s computer automatically read the amount as $15.00 (no human tellers involved), and subsequently a bunch of his bill payments, etc… bounced. The bank covered the fee for the bounced check, but he had to work out the mess with the bill companies himself.