Ever since their inception it has been the case that cheques are not a promise to pay by the bank, but a request to the bank that it pays, out of the funds deposited by the customer, an amount to a third party. This means that the bank will only honour the cheque if the account holder has sufficient funds to meet it or it can be covered by an agreed overdraft or other line of credit.
Cheques are not legal tender and never have been. Even today, if you owe someone money they are not obliged to accept a cheque. Don't have an account? Sign in via your Institution. You could not be signed in, please check and try again.
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All rights reserved. Home KnowledgeBank What is legal tender? What is legal tender? Many people are confused about what legal tender means. Let us help you out. What does legal tender mean? Scottish and Northern Ireland banknotes. When do Bank of England notes stop being legal tender?
A withdrawn One Pound banknote. Find out more What is money? How do card payments work? Will cash die out? What is GDP? Share This Video Whatsapp. Text Solution. Solution :. Very Important Questions. National Education Day: e-learning Transforming Educational Landscape National education day: e-learning transforming educational landscape.
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