Bearer, ie the name of the beneficiary is NOT mentioned. If you are the holder of a bearer check , you can immediately debit it from the bank whose address is stated on the check. You can also transfer it to a new beneficiary like a banknote by simply handing it over. That check is therefore literally affordable to the person who ‘shows’ him. However, it follows that a
unfair finder can cash in a bearer check as easily as the rightful beneficiary. That is why it is much safer to write a check ‘on order’.
To order means to a named beneficiary, whether or not preceded by the ‘to order’ clause. The
In this case too, the beneficiary can immediately debit the check from the bank, but he can also transfer it to another person.
If the issuer wishes to prevent the check from being collected by someone other than the first beneficiary, he must state after the name of the beneficiary: ‘Not to order’. As a result, this check can only be paid to the named beneficiary: no one else can cash such a check . It is therefore not transferable. Equivalent clauses for the expression “not to order” include “not to anyone else” and “to him / her alone.”
How to use Check?
As a checkbook holder you can do two things with this:
– use the checks as payment;
– withdraw money from your bank account: to do this, you write out checks in favor of yourself or bearer and you deposit them at the bank.
How can you transfer a check?
You can transfer checks mainly in two ways:
– by simple delivery
This method can only be used with bearer checks;
– by endorsement
The beneficiary can endorse his check to a new owner in two ways. If he only places his signature on the back of the check, it becomes a bearer check. This is also called a blank endorsement. Have the signature preceded by the statement: ‘Pay to order from then it remains a check to order. It is important, however, that anyone whose signature appears on a check is jointly responsible for the payment towards the final beneficiary. In this way, the endorser – the person transferring the check by placing his signature on the back – can be charged for payment if the checker fails to do so!
Can someone cash a check for another person?
Any check , including a non-transferable, can be cashed by a third party. You do this by endorsing the check on the back ‘for collection’. Equivalent entries are ‘in mandate’ or ‘value for collection’ or a similar entry.
The person who collects can behave towards the bank as if the check were his. He may collect, give discharge and have protest. Unless the client objects, he can in turn give the check to another person for collection. A collection endorsement must therefore clearly contain the in-casso statement; otherwise it is considered to be transfer of ownership.
When can / must you cash a check?
A check is affordable at sight. Any conflicting statement is considered as not written. In this context, each holder must keep a close eye on two periods.
‘Affordable at sight’ implies that, even if a holder offers a check before the day mentioned on the check as the date of issue, he is still affordable with the offer. However, if he offers the check after the issue date stated on it, it is best to do so within a certain period.
This term, called ‘offer period’, is payable in Belgium for checks:
– eight days, if the check is issued in Belgium;
– twenty days if the check was issued in Europe or in a coastal country of the Mediterranean;
– one hundred and twenty days, so the check was issued in another country. These offer periods start from the issue date stated on the check. The date of issue itself is not included in the period.
If the last day of the offer periods falls on a Saturday, Sunday or public holiday, the period is extended to the next working day.
What happens or can happen if the check is not offered within this offer period?
A check, offered after the specified period, is still valid. However, if payment cannot be obtained from the banker, the provider can only turn against the trigger and not against the end-beneficiary (s). If the holder of a check offers this after the offer period, however, there is a risk that the check will be revoked or that the credit will no longer be available on the account, which makes the check more difficult to collect.
The holder of a check can offer this to the banker and receive payment up to six months after the offer period.
After this prescription period (ie offer period + six months), the check can no longer be used as a means of payment at sight, in other words, the banker no longer pays. However, the underlying claim (ie the reason for issuing the check) remains. Limitation periods apply to this claim than for the check.
h. How can you cash a check? Payment of a check
As already stated in the definition, the check is essentially a payment method. However, it is true that anyone who issues a check has not yet paid his debt. The debt that you want to pay by check is only actually paid when the beneficiary of the check was paid in cash or when the amount was deposited in his account. Proof that the payment has been made is provided on the statement of account on which the debit of the check is stated.
For example: if an invoice states ‘Paid with check no. …’, this is not yet sufficient as proof of payment. Only the office where the tractor holds his account can legally pay the check.
However, even before the paying office has paid the check, the holder of a check can dispose of the amount stated on the check. The check is then not paid to him, but he receives ‘direct credit’ on the check. This means that the establishment where the check is offered (either from the same bank or from another bank) will advance the amount of the check to the holder. In that case, the bank pays on the condition that the person who collects the check will return the money if there is not enough credit available at the office where the account is held to pay the check (a so-called resolutive condition).
What if a check remains unpaid?
In the event of non-payment, the holder of the check can exercise his right of recourse against the endorsers, the trigger and other check debtors. The conditions for this are:
– The holder offers the check in time for payment.
Timely ‘means within the offer period.
– Have the refusal of payment determined.
The holder has the check ‘protest’. This is done by:
– a protest deed, ie an authentic deed, drawn up by a bailiff;
– a protest-replacement statement, ie a statement from the banker involved, dated and written on the check stating the date of the offer;
– a dated statement written on the check from a clearing house, whereby it is established that the check was presented on time, but was not paid.
The non-payment must be determined before the end of the offer period. If you offer the check on the last day of the offer period, the protest or the equivalent statement can still be validly drawn up on the next working day.
If you do not have the check protested in time, you can – as with a late offer – no longer be able to reclaim the previous endorsers or check debtors.