According to Article 81 of my country’s “Bills of Exchange Law”, a check is a bill issued by the drawer, and the bank or other financial institution entrusted with the check deposit business shall unconditionally pay a certain amount to the payee or holder upon seeing the check.
A check is a sight draft with the bank as the payee, that is, the depositor’s unconditional entrustment or order to the bank to pay a certain amount. The drawer issues a certain amount on the check, requiring the bank receiving the check to pay a certain amount immediately upon seeing the check.
After issuing a check, the drawer shall bear the liability on the bill and the legal liability. The former means that the drawer guarantees the payment of the check to the payee; the latter means that when the drawer issues a check, he should have cash of not less than the face value in the paying bank. If the deposit is insufficient, the check holder will be rejected when presenting the check to the paying bank for payment. This kind of check is called a bad check. The drawer who issues a bad check shall bear legal responsibility.
According to the provisions of my country’s “Bills of Exchange Law”, the drawer must assume the responsibility of guaranteeing payment to the holder in accordance with the amount of the check issued. When the drawer’s deposit with the payee is sufficient to pay the check amount, the payee shall pay the full amount at that time. It is also stipulated that the amount of the check issued by the drawer shall not exceed the actual amount of deposit at the payee at the time of payment. If the amount of the check issued by the drawer exceeds the actual amount of deposit at the payee at the time of payment, it is a bad check. It is prohibited to issue a bad check.
A check must record the following matters: the words “check”, an unconditional payment order, a determined amount, the name of the payee, the date of issue, and the signature of the drawer. If a check does not record any of the prescribed matters, the check is invalid.