Is a bank cheque legal tender?

One of the recent debates among ourselves here at London Registrars concerned the tendency of some firms solicitors to still send us cheques in payment of invoices. While these cheques are usually for less than £200, we advise against clients of our services depending on us always accepting cheques as payment.

The reasons for this are several: Firstly, our nearest bank branch has been closed since before the lockdown, and the next branch – over half an hour away in the City – has not reopened yet following the easing of restrictions. To bank a cheque is a costly exercise for us  as it takes one of our employees the best part of an hour-and-a-half to bank a cheque.

There is also, however, the very little-known issue of the law surrounding cheques – as detailed below.

Cheques are not legal tender

To understand our policy against the use of cheques as payment where at all possible, it is instructive to look back at how they have always been defined.

Ever since cheques were first introduced, they have not been a promise to pay by the bank, but instead a request to the bank that it pays a certain amount to a third party, out of the funds the customer deposits. The Bills of Exchange Act 1882, for instance, defines a cheque as a written order from an account holder, instructing that their bank pays – on demand – a specified sum of money to one or more named beneficiaries.

As a consequence, a bank will only honour a cheque if the account holder has enough funds to meet it, or if it can be covered by a line of credit such as an agreed overdraft.

At no point in their history have cheques ever been legal tender. This means that if you owe money to someone, they are not obliged to accept a cheque. A creditor has the right to be paid in legal tender, and can refuse any other form of payment.

I have heard various stories about cheques being written on unusual objects. Is this legal and, if so, what is the minimum information required on such a cheque? Would any reputable bank honour such a cheque?

• The Guinness Book of Records (well at least my old copy) claims that the strangest cheque was one written on a live cow.

• As long as you have the bank details, account details, your signature, and the amount to be transferred, you can legally use anything as a cheque, providing that object is in itself legal. Cheque books are a service provided by the bank to save you the bother of writing out everything.

  Gareth Williams, Hilversum Netherlands

• It was legal to write a cheque on anything until recent anti-fraud legislation specified a required format for cheques.

• Actually it is possibly to write a cheque on almost anything. I was informed at some point (I work for a bank) that as long as you have an item which contains details of your account, the date, the payee and the amount on it together with your signature you can use it as a cheque. I have also heard about the cow cheque. In answer to whether or not banks would accept it, I presume that it is at the discretion of the bank. They are likely to have clauses in the account terms which enables them to reject cheques on any basis. Presumably therefore if you cleared it with your bank first you would be able to use anything as a cheque.

• A.P.Herbert's "Misleading Cases" and subsequent books have a number of invented cases involving cheques, including one written on an egg. For what it is worth, when I worked (briefly) for a bank twenty years ago and had to sit the Institute of Bankers exams, the guidance was that a cheque could in theory be written on anything portable (ie not chiselled into the cornerstone of a building) as long as it did not involve an offence such as defacing the coin of the realm.

  Mark Etherton, Vienna Austria

• It is legal to write a cheque on anything so long as it contains all the relevant details. i only know this because I once wrote one myself on the back of a till receipt when in the bank. However some bank's "Terms and Conditions" now state that you must use the cheque book issued I presume that this is to stop fraud. The cow cheque was true and, according to an old Farmers Guardian, was a protest by a farmer to a UK/European policy that led to his cattle being practically worthless. Although I believe the bank insisted on keeping the cow as evidence of the cheque and so had to pay market value for it.

• You would also have to pay 'processing charges' which will be marginally higher for any non-standard cheque but very expensive for, say, a cow.

• How would you pass the cow cheque under the glass?

  Terry Wilson, Brighton UK

• It's a good job that the cow cheque didn't 'bounce'.

  Andy Shember, Manchester England

• I recall being told way back in the 70's (and not quite believing it) that a cheque could be written on anything. Later I read in my local paper of a protest cheque made out to the inland revenue by a local farmer? on the side of a horse (they had trouble processing it, because the horse would not fit in their office lift). Later still, there was an organised protest by some small business club about VAT returns where the club provided blank cheques to their members which had been printed on 2 foot x 3 foot cards. Another small businessman who was a builder would provide the paving stones that the cheques could be pasted to... Once in the early 1980's (pre ATM's) I visited a branch of an English bank in England and they provided me with a blank 'counter cheque' which I used to draw cash from my Scottish bank account on an account held in Scotland. The last time I tried to do this it was not possible because the bank in question would only honour cheques that they had had issued themselves. I suspect that this is one of the terms and condition of business for most banks now - they will only accept and process cheques that they issued.

  Marcus Nichols, Hartlepool, Cleveland

• As a protest for the way motorists are hounded by the police and local authorities, I wrote my cheque for a parking fine on toilet paper. It was formated to replicate the details on a regular bank issued cheque and was sent with a covering letter stating that the recipients should consider themselves fortunate that the stationery I had selected had not first been used for the purpose it was originally intended. I am awaiting a result.

  Dick Roper, Long Melford, Suffolk

• When I was very young (I'm 74 now, so this was long ago) I recall reading about a cheque signed on a pig. The bank refused it because it had no evidence on it that the stamp duty payable then had actually been paid. The duty was twopence, but a tuppenny stamp from the post office rendered the cheque valid.

  Keith Short, Fortaleza-Ce Brazil

Why is a check not a legal tender?

Which is not considered legal tender?

What is considered legal tender?

Is cheque a legal tender in India?