“Bounced Promises: Legal and Financial Implications of Dishonoured Cheques”
Introduction In an increasingly digital economy, cheques may seem old-fashioned, yet they remain a critical instrument of trust in personal and business transactions. However, when a cheque is returned unpaid—commonly known as a “cheque bounce”—the results can be more than just inconvenient; they can be financially damaging and legally serious. A bounced cheque, especially in jurisdictions where it is criminalized, may trigger penalties, litigation, and reputational harm. This article explores the anatomy of cheque bounce cases, focusing on both legal frameworks and the practical challenges of enforcement. Understanding Cheque Bounce: Common Causes A cheque may be dishonoured for several reasons: Insufficient funds in the drawer’s account Signature mismatch or illegibility Stale cheque (presented after its validity period, typically 3–6 months) Stop payment instructions Incorrect details (amount, payee name, date) Among…