Charateristic of Cheque

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Question 1
Define cheque and identify the characteristic of cheque.

CHEQUE

Definition of cheque is under section 73, a cheque is a bill of exchange drawn on a banker and payable on demand.

The characteristics of cheque is it is an unconditional order in writing. “ Writing ” has been in section 3 of the Interpretation Act,1967 to include all modes of representing or reproducing in visible form. Hence, a cheque may be printed and even be written in pencil as well as ink although it is not advisable tp write in pencil for fear of fraudulent alteration.

The second characteristic of cheque is it is signed by the drawer. The cheque must be signed by the drawer or his authorized agent. Signature by means of a rubber stamp is acceptable. However, it must be a fixed with the intention of it being the drawer’s signature.

The third characteristic is it is drawn on a banker ( drawee ).

The forth characteristic is it orders the banker to pay a sum certain in money on demand. The amount of the instrument must be certain. According to section 9(1) a sum is considered certain although it is required to be paid with the interest, by stated instalment, by the instalment with a provision that upon default in payment of any instalment the whole shall become due, and according to an indicated rate of exchange or according to a rate of exchange to be ascertained as directed by the bill.

Lastly, the characteristic is it is drawn in favour of a specified person (payee) or to his order in favour of a bearer.A bill is payable to the order of a specified person where the name of the payee is stated. Under section 8 (4) & (5). For example, ‘pay Anita Abdullah’.A bill is payable to bearer in the following example. ‘Pay bearer’ or ‘Pay Anita or bearer’ . Thus,Anita herself can obtain payment or she can negotiate the bill to another by mere delivery. The only or last indorsement is in blank, for example the...
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