Simple English definitions for legal terms
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A cold check is a type of bad check that is not honored by the bank because the account has insufficient funds or does not exist. It is also known as a hot check, worthless check, rubber check, bogus check, false check, or dry check. A check is a draft signed by the maker or drawer, drawn on a bank, payable on demand, and unlimited in negotiability. There are different types of checks, such as cashier's check, certified check, personal check, traveler's check, and more. A canceled check is a check that has been paid by the bank on which it was drawn and is often used as evidence of payment.
Definition: A type of bad check that is not honored because the account either contains insufficient funds or does not exist.
Example: John writes a check for $500 to his landlord, but he doesn't have enough money in his account to cover the payment. When the landlord tries to cash the check, it bounces back as a cold check.
This example illustrates how a cold check is a type of bad check that is not honored by the bank due to insufficient funds or a non-existent account. It can cause problems for both the person who wrote the check and the person who received it, as the payment is not made as expected.