Certified Check

Also found in: Dictionary, Thesaurus, Financial, Wikipedia.
Related to Certified Check: certified cheque

Certified Check

A written order made by a depositor to a bank to pay a certain sum to the person designated—the payee—which is marked by the bank as "accepted" or "certified," thereby unconditionally promising that the bank will pay the order upon its presentation by the payee.

A certified check is considered the equivalent of cash since the bank, by its certification, guarantees it to be cashable. No bank is under a duty to its depositors or anyone else to certify checks since it involves the assumption of a new obligation for which it is primarily responsible. It is a commonplace practice, however, and there is usually a small fee for this service. A certified check is often required by a payee who does not want to rely only upon the credit of the drawer, the person who wrote the check.

A payee who requires a drawer's check to be certified ensures his or her right to payment. Not only can the payee seek payment from the certified bank, but if for some reason the bank refuses to pay, the payee retains the right to enforce payment from the drawer. In this situation the bank is primarily liable while the drawer is secondarily liable.

Occasionally the payee or subsequent holder of the check—a person who has been legally given possession and the right to payment—will present the check to the drawer's bank for certification. Although the bank is obligated to cash the check, it need not certify the check because only it, not the drawer or any subsequent endorsers, would be liable for its payment. Some banks will certify a check in such instances only with the approval of the drawer.

If a bank refuses to pay a check that it has certified, its drawer or holder may sue the bank for its wrongful conduct, called dishonor. A certified check, a type of Commercial Paper or negotiable instrument, is governed by Article 3 of the Uniform Commercial Code.

certified check

n. a check issued by a bank which certifies that the maker of the check has enough money in his/her account to cover the amount to be paid. The bank sets aside the funds so that the check will remain good even if other checks are written on the particular account. Like a cashier's check, a certified check guarantees that it is immediately good since it is guaranteed by the bank and the recipient does not have to wait until it "clears." (See: cashier's check)

References in periodicals archive ?
Bidders should submit a certified check or bid bond, payable to the City of Pensacola in the amount of one thousand dollars ($1,000) for a period of sixty (60) days.
Proposals must be accompanied by a Bid Deposit in the form of a Bid Bond, Certified Check, Money Order or Cashier s Check in the amount of ten percent (10%) of the total amount bid, provided said check or bond need not be more than $20,000.
Under this procedure, an owner or tenant would deposit cash or a certified check in an amount equal to the value of the lien plus interest until the time of deposit.
Buyers may pay with cash, postal money order, certified check or cashier's check.
Bid Bond: Bidder Shall Submit With Their Bid, A Bid Bond Accompanied By Power Of Attorney, Or Certified Check Or Cashier%s Check Or Cash In An Amount Of 5% Of Their Total Bid.
You can hand deliver or overnight mail the requests, along with a certified check or money order for the permit and a SASE.
Bidder shall submit with the bid a certified check or bid bond in the amount of ten percent (10%) of the total price bid, but not in excess of $20,000.
A cashier's or certified check for $125,000 is required to bid on the property.
Currency Only), Cashier%s Check, Certified Check Or Bid Bond, As Stated In The General Requirements, Specifications And Conditions (short Form Contracts) Contained In This Document.
The balance of the purchase price was to be paid at closing in the form of cash, certified check or bank check.
It is required for an> contract exceeding $10,000 00 that the bidder submits with his bid a certified check, a cashier%s check, or a bid bond payable to the City of Birmingham in the amount of $500.
Buchman was unprepared to make a bid, he asked the referee for time to go to his bank to secure a certified check for the downpayment deposit.

Full browser ?