You or someone you know has probably postdated a check in the past. Postdating means you write a check for a future date. This is usually done because the funds will not be in your bank before the date you have chosen. Therefore, if the person you gave the check to tries to cash your check before that date, the bank will likely not honor it. However, if the check is deposited, it is possible that it will be cashed immediately, and possibly bounce. Not to worry, though, as generally, postdating a check is not fraud.
Uniform Commercial Code
A personal check is a type of negotiable instrument governed by provisions of the Uniform Commercial code (“UCC”), which was created in 1952. The UCC, while not itself a law, has been enacted in all 50 states, with some minor modifications in certain states.
Under the UCC a check is an order to pay a fixed amount of money. The check writer is the “payor” and the person or entity receiving the check is the “bearer” or “payee.” The UCC allows the negotiable instrument (the check) can be made payable on demand or at a definite time. (UCC § 3-104) Therefore, a postdated check falls in the latter category of an order to pay the bearer at a definite time in the future.
While it is completely legal to postdate a check, the bank where the check is presented may charge the payor’s account even prior to the date indicated, even if that creates an overdraft in the account. (UCC § 4-401). So, a payee can successfully cash a postdated check before the date written on the negotiable instrument.
Exceptions in the Uniform Commercial Code
There is an exception, however, to the bank honoring a postdated check before the date indicated even if an overdraft will occur. This includes:
The payor notifies the bank that a particular check has been postdated;
The payor identifies or describes the particular check with reasonable certainty; and
The notice the payor gives the bank provides it with reasonable opportunity to take the requested action.
If the payor complies with the above, and the bank nevertheless charge’s his or her account, the bank may be liable for damages to the payor resulting in its unauthorized action. Damages may include the bank dishonoring later checks or transactions drawn on the account.
Not Check Fraud
It is important to know that any type of fraud requires a misrepresentation upon which the victim relied. When you postdate a check, you are truthfully telling the payee that funds are not immediately available but will be on the date indicated.
If you or someone you know is being accused of check fraud, contact a knowledgeable attorney to learn about your rights and obligations under the law. The skilled Nevada lawyers at Parry & Pfau can help guide you through this process. You want to make sure any issue involving the threat of criminal prosecution is cleared up right away before the matter becomes more complicated and expensive.
(image courtesy of David Goehring)