Legal Definitions - check

A check is a written instruction to a bank or other financial institution to pay a specific amount of money from one person's account to another person or organization. It acts as a formal order from the account holder (known as the "drawer" or "payor") to their bank, directing the bank to transfer the specified funds to the individual or entity named on the check (known as the "payee"). Checks are typically "payable on demand," meaning the bank is expected to pay the amount when the check is presented, assuming sufficient funds are available in the drawer's account.

Here are some examples illustrating the use of a check:

• Paying Monthly Rent: Imagine Maria needs to pay her landlord for her apartment rent. Instead of cash or an electronic transfer, she writes a check for $1,500, signs it, and hands it to her landlord. The check specifies her landlord's name as the payee and her bank as the institution from which the funds should be drawn.

  This illustrates a check because Maria, as the payor, is issuing a written instruction to her bank to transfer a specific amount ($1,500) from her account to her landlord, the payee, for her rent obligation.

• Receiving Payment for Professional Services: A small business owner, John, provides consulting services to a client. After completing the project, the client sends John a check for the agreed-upon fee of $5,000. John then deposits this check into his business bank account.

  This demonstrates a check because the client, as the payor, has provided a written order to their bank to release $5,000 from their account and pay it to John, the payee, for the services rendered.

• Making a Donation to Charity: A donor wishes to contribute $250 to a local animal shelter. They fill out a check, writing "Paws & Claws Animal Shelter" as the payee, indicating the amount, and signing it before mailing it to the charity.

  This example shows a check in action as the donor, the payor, is instructing their bank to transfer a specific sum of money from their personal account to the animal shelter, the payee, as a charitable contribution.