Is it ever legal to post date a check?

wildcatgirl

I have more of a story than an answer on this one. A company which I used to work for accepted a post-dated check from a customer. The company accidentally deposited the check early. The check (for $13,000 I might mention) bounced. The accounts payable department tried to reach the customer but he would not return calls. Anyway, they ended up taking him to court over the bounced check. Turns out that the judge filed in favor of the defendant stating that our company basically should not have sent the check in for deposit and that the check was no better than a promisory IOU. The judge also stated that the check was no better than the paper it was printed on. The judge though DID order the defendant to pay our company for products delivered, which he eventually did. Just a little food for thought--instead of accepting a post dated check from someone, I give them a hold check authorization stating what date their check will be deposited on and have them sign it and give them a copy.

austintexas

Crazy canadians... its not that we don't bother to look at the date on a check.. its that the date doesnt matter at all on a check.. its no different than the memo space. Everyone wondering about post-dated checks you can find the answer in the Uniform Commercial Code...article 4..section 401c ...afterall we in America only care about the money

Curious13

Actually, MOST banks do not accept post-dated checks. All of the banks I have worked at do not. IF they do get through proof (the people who actually enter information and move it on to the Federal Reserve) the customer is able to complain and the bank can be held liable. A check is a legal document, if a date on a check is not yet current, the bank can not hold that check. Hope that helps!

Jaykid007

Bottom line..post dating is an agreement between the person writing the check and the person receiving it. I'm looking at a bank disclosure right now and it states it has the right to refuse or pay a post-dated check but otherwise states its illegal. I have been working for a bank for 20 years now.

Jaykid007

Any decent bank will put in their disclosure that they are not held responsible for negotiating a post dated check. Therefore, protecting them from being sued.

No credit check finance

If your thinking about taking taking post dated checks. ARC .net offers guranteed payments on the checks you take in even if they bounce. Customers are also allowed to make larger purchases and a business can take larger amounts that you would not normally risk.

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lalob

Why people use post dated cheques, what is the benifit of PDC?

Jaykid007

There is none. Its an agreement between you and the person you write it to. The banks dont recognize post dating checks and will cash them anyway. You take the risk or postdating it and it being cashed early by the payee and the bank. They have no recourse to you.

Leathal

There is legislation in Canada called - Bill of Exchange Act.

In Section 2 number 26 is clearly states:

Valid bill

26. A bill is not invalid by reason only that it

(a) is not dated;
(b) does not specify the value given, or that any value has been given therefor;
(c) does not specify the place where it is drawn or the place where it is payable; or
(d) is antedated or post-dated, or bears date on a Sunday or other non-juridical day.

Banks in Canada must abide by the law otherwise they can in very big trouble if they don't and realistically people can sue them as the LAW is clearly written out!

Leathal

Sorry I am double posting but I found more information out that I wanted to add to my orginal post but realized there is not edit option that I can see.

There is legislation which was put in place in 1882 in Canada called - Bills of Exchange Act that has been amended over the years, the latest amendment was done on June 19, 2009. You can find it at the Deparment of Justice of Canada website. This is the LAW that all banks in Canada must abide by.

This is from the June 19th version:

Section 2 number 16 - Bill of Exchange:

A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the perosn whom it is addressed to pay, on demand or at a fixed or determinable future time, a sum certain in money to or to the order of a specificed person or to bearer.

Section 2 number 26 - Valid Bill:

A bill is not invalid by reason only that it

(a) is not dated;
(b) does not specify the value given, or that any value has been given therefor;
(c) does not specify the place where it is drawn or the place where it is payable; or
(d) is antedated or post-dated, or bears date on a Sunday or other non-juridical day.


In the 1882 version of the Bills of Exchange Act they took the time to elaberate on what each of the points mean. Here is word for word what it says for (d) above:

A bill is not invalid by reason onl that it is antedated or postdated...

(meaning) If a bill payable on demand be issued bearing date after the date of issue, payment cannot be demanded before the date on the bill has come.

At another Government of Canada website for the Financial Consumer Agency of Canada it says this about Banking and Insurance with respect to cheques.

Post-dated Cheques:

The Canadian Payments Association (CPA) is the organization that develops rules for Canada's cheque-clearing and settlement system. CPA has developed a rule, called A1: Genernal Rules Pertaining to Items Acceptable for Exchange, for the Purposes of Clearing and Settlement, which states that any bank that is a member of the CPA cannont cash your cheque before the date indicated on it.

If your bank or trust company does cash the cheque before this date, CPA has another rule, called A4, Returned and Redirected Items, which allows for your finanical institution to return the cheque and put the money back into your account. You can only ask your bank or trust company to do this up to "the day before" the cheque should have been cashed.

--

So there you have it! The "real" law and rules that Canadian banks must abide by otherwise you can take legal action against them and win no doubt!

Leathal



Leathal