Features of a Certified Cheque:
- As the name suggests, certify means a guarantee carry by the payer's bank.
- A certified cheque is the written approval for a particular cheque by the bank that the signature of the bank customer on that cheque must be genuine and there is an ample amount of fund in the customer's account to clear the cheque when the cheque is presented for the payment.
- A certified cheque must be signed by both the party i.e. a customer and a bank. The bank and a customer are liable to pay under the UCC sec. 3409(d).
- If there is any problem regarding the certified cheque, both the bank and a client are responsible for giving assistance in a lawsuit to the beneficiary.
- A bank can impose terms and conditions upon its certification like a certified cheque becomes void after 60 days. if the cheque has been certified by error or acquired by fraud, in that case, it is corrected by cancelling the certification and send notice to the payee if the payee has not written " in reliance" on the certified cheque.
- This type of reliance would occur if the goods have been exported by relying on a cheque.
- In certified cheque, there is a possibility of forgery in that case a bank is not liable to pay for the forgery cheque.
- A Certified cheque is the one which has an offer of the bank, certified on the cheque that funds were available in the amount of the cheque at the time the cheque was originated and the signature on the cheque is legitimate.
- A bank will keep aside the funds and it will be only used to pay the certified cheque. If a cheque is not a fake, you no need to issue depositing funds into your bank account.