Q&As

At what point is a payment by cheque treated as being made? Does it make any difference if the recipient does not cash the cheque or delays in cashing it? Does it make any difference if payment was tendered by way of electronic transfers?

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Published on LexisPSL on 25/10/2017

The following Dispute Resolution Q&A provides comprehensive and up to date legal information covering:

  • At what point is a payment by cheque treated as being made? Does it make any difference if the recipient does not cash the cheque or delays in cashing it? Does it make any difference if payment was tendered by way of electronic transfers?
  • Tender
  • Cheques
  • Electronic transfers

In conducting our research we have made assumptions that A owes money to B and focussed on when, in this scenario, A’s payment obligation to B is discharged and whether (i) B’s delay in cashing the cheque makes a difference and (ii) whether the timing of discharge of A’s obligation is different where A has tendered payment by way of electronic transfer of money, such as an internet instruction by A to his bank to pay the sum to B.

Tender

In most cases, A is freed from liability for non-performance of a contract if he makes an unconditional tender or offer of performance in accordance with the terms of his promise and B refuses to accept performance, provided that the tender is made under such circumstances that the other party has a reasonable opportunity of examining the performance tendered in order to ascertain that it conforms to the contract. However, a tender of money does not discharge a debt.

Where A promises to pay a specific sum of money to B, the debt is not discharged by a tender of payment. If B subsequently sues for the debt,

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