Is post dating checks illegal in california
There are several advantages to taking postdated checks in settlement of an account balance including these: 1.
The fact that you are holding a check that will be presented to the bank for payment on a specific date places a burden on the debtor to have funds on deposit when the check is presented. In the event that the check is dishonored and the customer is sued, the existence of the check makes it harder for the customer to argue that the debt was never owed. Even if a post dated check is not honored when it is first presented, there is always the possibility that the check will clear at its second presentment, or that the creditor can tender the check to the debtor's bank on a collection basis.
According to the UCC Section 4-403(b), the payer is required to notify his bank in the event that he has issued a PD check, and to provide information such as the name of the payee, the value of the check and the date on which it is due for payment.
Without this information, the bank may either reject or "bounce" the check or cash it.
Other countries may have their own laws on the matter. To bring you the best content on our sites and applications, Meredith partners with third party advertisers to serve digital ads, including personalized digital ads.Those advertisers use tracking technologies to collect information about your activity on our sites and applications and across the Internet and your other apps and devices.People usually write PD checks when insufficient funds are available to cover the check on the date on which the payee needs it.Article 3-113 of the Uniform Commercial Code (UCC), which regulates sales and commercial transactions in all U. states, specifies that the date written on the "instrument" is what determines the date of payment, even if it the date on the check is later than the day when it is issued.