Key Elements Of The Uniform Commercial Code (UCC)

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A check is simply an order written by someone, the “maker,” directing the Credit Union or the bank the “drawee” to pay a specified sum to the order of a certain named person(s), “payee.” The check also directs the Credit Union to debit the drawer’s account by the amount of the check.
The use of checks is governed by many laws. However, the law with the most impact on check usage is the Uniform Commercial Code (UCC).
The financial institution (drawee) paying the check, or on which the check is drawn, is responsible for seeing that the money is paid to the proper person if the payee is named. As proof that the money has been paid, the drawer expects to find the payee’s endorsement on the paid and canceled check. “Endorsement” can be defined as the legal transfer of one’s rights to the check to another party. A check represents money, so an endorsement transfers ownership of that money from the payee to another person or entity.
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Date – when the check was written (top right)
2. Words of Negotiability – payee’s name or the word “cash” (This appears on “pay to the order of” line)
3. Numerical Amount – amount of the check in
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