Cheque

A cheque is a negotiable instrument containing an instruction by a person with a bank account (the drawer) to the bank (the drawee) to pay a specified sum. Cheque law is governed by TCC Article 780 et seq. and Cheque Law No. 5941.

Mandatory Elements (TCC Article 780)

• The word “cheque”
• An unconditional order to pay a specified sum
• The trade name of the drawee bank
• Place of payment
• Date and place of issue
• Drawer’s signature
• Serial number assigned by the bank and a QR code

The QR code allows holders to access certain data about the account holder and drawer.

Presentment Periods (TCC Article 796)

• Payable in the place of issue: ten days
• Payable elsewhere: one month
• Issued abroad: one month if on the same continent, three months if on different continents

Periods start the day after the date of issue stated on the cheque. The common “post-dated cheque” is a cheque bearing a future issue date; if presented before that date and not paid, no legal proceedings can be brought.

Bounced Cheques

• Civil consequences: For a cheque presented in time and not honoured, the holder has recourse against the drawer and endorsers and may use bills of exchange enforcement. The bank must pay up to a statutory amount updated annually.
• Criminal consequences: Upon the holder’s complaint, a judicial fine of up to 1,500 days per cheque and a ban on issuing cheques and opening cheque accounts (Law No. 5941 Article 5). The fine may not be less than the unpaid amount. Cases are heard by the enforcement courts.

Limitation

The holder’s rights of recourse against endorsers, the drawer and other parties are time-barred three years after the end of the presentment period (TCC Article 814). A cheque that loses its status as a negotiable instrument may still serve as evidence of the underlying debt.