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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"His driver meets the seller of the car, checks the car and hands over the bank draft.
The false Royal Bank of Scotland bank drafts are signed and stamped "City Office of London" and bear the code 15100062721883000199999745.
Mr Neary added: "Everybody is happy until the seller goes to the bank the following morning where he hands over the bank draft and it's a forgery.
A FOREIGN conman fleeced motorists using fake Scottish bank drafts - even though he spelled Scotland wrong.
Two other men connected to the company, Raymond Folkes and Christian Obumneme, were convicted of handling forged multi-million dollar bank drafts. The offences happened between February and March 1999.
Kevin Meehan, 61, of Stanaway Road, Kimmage, Dublin, was convicted on Monday of handling sterling bank drafts totalling pounds 92,351.17, IRpounds 4,500 in cash and a cheque for IRpounds 4,000.
Kevin Meehan, 60, of Stanaway Road, Kimmage, Dublin, has pleaded not guilty to handling sterling bank drafts totalling pounds 185,738 - pounds 4,500 in cash and a cheque for pounds 4,000 - on various dates in 1995 and 1996.
Thomas Meehan, 51, of Dunmore Park, Ballymount, Dublin, admitted handling bank drafts with a value of pounds 148,386.34 in August and September 1996 knowing the money was the proceeds of drug trafficking or other criminal activity.
Forged US bank drafts for millions of dollars, as well as several thousand pounds in cash, were also recovered in the swoop at Clonee in Co Meath.
The massive probe into Haughey's finances revealed that three mystery bank drafts worth pounds 750,000 paid off the politician's huge overdraft 20 years ago.
Dunne told Day Two of the hearing at Dublin Castle he had played a round of golf with the money - in the form of three bank drafts - stuffed in his pocket.
He was admitted to a mental hospital after he was found wandering the streets in a confused state carrying bank drafts worth pounds 250,000.