Understanding Checks: The basics

Checks are so rarely used these days that a lot of people just don't understand them anymore. But if you get paid from an employer, chances are that you will receive a paper check at some point.

There are five parts to the front of the check that are important to its negotiability, that is, to its ability to be used as a way to exchange money.

1. The date-- The date must be current. After six months the check is stale dated and cannot be deposited or cashed. If the check is written for a date in the future, it is post-dated and no good until that date. That is not to say that a bank won't accept the check early; banks are not breaking any laws in negotiating a post dated check. But as  a courtesy to the account holder who wrote the check, if the bank notices the post date it probably won't accept it.
2. The Pay to the Order of line-- this is who the check is made payable to. No one else has the legal right to the money. NO ONE. Not the parent, not the spouse, not a neighbor. Only the person named in the check has the right to negotiate it. Sometimes a bank will cash a check for a parent or spouse IF both the person the check is made payable to and the person negotiating it are on the same account. This is an exception. Even if the person that the check is made payable signs the check over to someone else, a bank may require that both parties appear in person in order to negotiate the check.
3. The numeric amount of the check-- this is where the amount of the check is written in numbers like: 100.00. This is for convenience only and must match the legal line.
4. The legal line-- this is where the amount of the check is written out in words like: one hundred dollars. This is the amount that the check is legally made out for. If it doesn't match the numeric amount, it is the legal amount that the bank must use. The bank can, alternately, refuse to negotiate a check where the numeric and legal amounts don't match.
5. The authorized signature-- a check is a contract. If the check is not signed by the account holder on the bottom right hand corner, the check is not authorized and not legal. Only the owner of the account from which the check is drawn can sign the check.

These are the things that make the front of a check legal. Endorsement (signing the back of the check) is a completely different matter that I will touch upon in the near future.