Certified Check

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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)

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He explained that DOT is working with contractors on such issues as using bid bonds instead of cash or certified checks with bid packages, allowing contractors to transport cranes on at least part of a day before a holiday, expediting payments so that contractors are compensated quicker based on completion of a smaller percentage of work, and setting reasonable goals regarding MBE/WBE contracts and then seeing that the goals are met.
When going to an auction, Martin advised the potential bidder should come with certified checks to cover the downpayment on the initial bid and have on hand incremental checks to cover downpayments up to the highest amount the bidder is willing to pay.
ESNY provides bonded independent security for escrow deposits, assuming direct responsibility for escrow funds at every step of the escrow process, "right through to the delivery of signed and certified checks at closings."
Bid Bonds, Certified Checks Or Cashier%s Checks (See Bid Form)
BID BONDS, CERTIFIED CHECKS OR CASHIER%S CHECKS (SEE BID FORM) When required each bid shall be accompanied by a bid bond signed by a surety company authorized to do business in Connecticut or by a cashier%s check or certified check made payable to the Town of Groton.
BID BONDS, CERTIFIED CHECKS OR CASHIER%S CHECKS (SEE BID FORM) : When required each bid shall be accompanied by a bid bond signed by a surety company authorized to do business in Connecticut or by a cashier%s check or certified check made payable to the Town of Groton.

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