A cheque is an instrument that instructs the bank to pay a
specified sum of money from the bank account of the writer to the
person who's name is mentioned on the cheque. The person who writes
the cheque is know as the drawer and has a bank account where his
money is held. Following are the characteristics of a cheque-
- Written format- A cheque should always be in
writing. It is only considered as an instrument if it is in written
format.
- Specific amount and signature- A cheque should
have the amount clearly written on it and signed by the
drawer.
- Unconditional order to pay- A cheque that
contains an unconditional order by the drawer to the drawer bank to
make the specific amount of payment as instructed. A cheque that
has a condition is not considered valid.
- Date on the cheque- a cheque should be dated
and is valid upto 6 months from the date mentioned on it. After the
six months period it is called a stale cheque.
- Can be drawn on one's own self- The
drawer can write a cheque on their own name. The cheque is to be
paid to the drawer himself.
- No acceptance required- A cheque does not
require any acceptance or stamp from the bank to be considered as
valid.
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doubt.