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Validity of Customer Notation

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A customer has placed the phrase "void after 90 days" on his checks. A check was presented and paid after the ninety day timeframe. The customer wants the money back. Are we liable?

No, you are not liable. Occasionally, businesses put legends on their checks to encourage payees to negotiate them promptly. The UCC attaches no importance to them; the language does not automatically make the check void after the stated period. It does not rise to the level of a contractual responsibility to return stale items on the part of the drawee bank unless the drawee bank agreed to the responsibility. In my experience, such commitments are only made in positive pay operations based on specific contractual language. (Federal government checks are handled differently.)

You don't say how the customer placed this language on his checks. If he ordered the checks through your bank and your check printer affixed the language on your instruction, then you need to have a sit down with the employee who processed the order. Your bank might agree to put the language on checks ordered by a business or government entity after an appropriate discussion. That discussion might include requiring the customer to sign an acknowledgment that the bank is not responsible for enforcing the legend.

However, under no circumstances should you go along with putting such language on checks ordered by an individual. Any individual who wants this is in need of a hobby and will expect your bank to devote some time to his hobby in the future.

First published on 9/20/10

First published on 09/20/2010

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