Is it illegal to post-date a check, so that it will be honored when I have enough funds in the bank?

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Question: 

I own a small business. Recently, at the request of my tech support contractor, I renewed my service contract with him. I asked that he not cash the check for a week because I would not have enough funds in the account until that time. I also post-dated the check one week. He said okay and dashed off to his next appointment.

Now, I learn that he immediately tried to cash the check and it was refused by the bank! He called me and said, “Check fraud is a crime!” and he’s going to file a complaint against me. Did I break the law?

Answer: 

You did not commit a crime and you probably did not violate the law. Check fraud laws vary somewhat from state-to-state. But, in general, it is not a crime to post-date a check.

This article discusses general laws about checks, post-dating, and the parties’ rights.

Uniform Commercial Code

Personal checks (and other “negotiable instruments”) are covered by provisions of the Uniform Commercial Code (“UCC”), a set of model laws first developed in 1952 by some of the top legal scholars in the U.S. The drafters of the UCC intended to create a single body of regulation to uniformly cover commercial transactions, particularly interstate transactions. This goal addressed the concern that having 50 different sets of state laws governing such transactions would cause confusion, conflict, and delay in interstate commerce.

Although the UCC is not itself a law, it has been enacted in all 50 states (with limited modifications in certain states).

Post-Dated Checks

Under the UCC, a check is an order by the “payor” (you, the small business owner) to pay a fixed amount of money to the bearer (or payee -- the tech support contractor). A negotiable instrument can be made payable “on demand” or “at a definite time.” (UCC § 3-104.) A post-dated check is an order to pay the bearer at a definite time in the future.

Obligation of the Bank

Although it is legal to post-date a check, the bank to which the check is presented for payment may charge the payor’s account even before the date of the check and even if doing so creates an overdraft. (UCC § 4-401.) So, a bank can charge a person’s account for a check the person post-dated when the payee tries to cash it before the date on the check.

But, there is an exception to this rule: The bank must not charge the person’s account if:

  • the payor notifies her bank that she has post-dated a particular check,
  • the payor describes or identifies the particular check with “reasonable certainty (such as by check number, payee, amount, or otherwise), and
  • the notice that the payor gives the bank provides it with a reasonable opportunity to take action.

(UCC 4-401 (c).)

Should the bank nevertheless charge the payor’s account even after receiving proper notice of post-dating as described above, the bank may be liable for damages to the payor that result, including damages from dishonor of later checks drawn on the account.

It was not clear from your question whether you promptly notified your bank of the post-dated check, but it seems that you did not because you do not mention it. This means you likely cannot take advantage of the protections afforded by Section 4-401. However, the bank did not honor the check, so at least you are spared overdrafts resulting from the check being cashed. In the future, be sure to immediately notify your bank of any post-dated checks.

No Fraud Because No Misrepresentation

Fraud of any type requires a misrepresentation that the victim relied upon. You did not misrepresent anything, because you truthfully told the tech support contractor that funds were not immediately available but would be on the date that you post-dated the check. He did not rely on any misrepresentation, but rather disregarded a truthful representation. As a result, you have not engaged in fraud.

Incidentally, the tech support contractor’s conduct may be edging into extortion. That is, he may be trying to squeeze more money out of you through a threat of criminal prosecution.

See a Lawyer

Anytime criminal prosecution is threatened, it is wise to consult with an attorney, whether to ease your concerns about your own actions or to determine if the person threatening is engaging in extortion. And, seeing an attorney early may aid you in clearing up this matter before it blows up into something more complicated and expensive.

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