Status of Stale Dated/Post Dated Checks
by Ken Golliher, BOL Guru
QUESTION: At a recent seminar I believe that I was told that under new UCC rules that there is no such thing as a stale dated or postdated check. Is this true or am I dreaming.
ANSWER: I really hope you actually were dozing and the speaker did not really say there is "no such thing as a stale dated or a post dated check." The modern version of the UCC addresses post dated checks at 4-401 and stale dated checks at 4-404; the concepts are very much alive.
However, the current version of the UCC allows a bank to pay or return both items at the bank's election. (Standard disclaimer: check the relevant sections of your state's UCC to assure that they do not vary from the model language.)
Many of the "tweaks" found in the most recent version of the UCC are intended to accommodate the evolution of bank processes, specifically the fact that most checks paid by automated means do not get a sight inspection. They will be paid without regard to the date.
Clearly, the risk of post dating a check is on the customer. If it is paid early, there is no harm as a matter of law. Modern signature cards even make the point as something of a disclosure. However, if the customer notifies the bank of the postdating, the bank has to figure out how not to pay the item prior to the date on the notice it received.
The stale dated check remains a quagmire. Many members of the public believe that banks cannot legally pay a check that is more than 6 months old and are furious when it happens. Their claim of "injury" runs from the goofy, "I already added back in my checkbook" to a source of concern to the bank, "I stopped payment on the check 8 months ago."
My suggestion to the drafters of the code would be to make stop payments for the life of the account and to eliminate the concept of the stale dated check entirely.
First published on BankersOnline.com 12/3/01