Cheque

Cheque, or CHECK, in commercial law, a bill of exchange drawn on a banker and signed by the drawer, requiring the banker to pay on demand a certain sum in money to or to the order of a specified person or to bearer. In this, its most modern sense, the cheque is the outcome of the growth of the banking system of the 19th century. For details see Banks and Banking: Law, and Bill of Exchange. The word check,1 of which “cheque” is a variant now general in English usage, signified merely the counterfoil or indent of an exchequer bill, or any draft form of payment, on which was registered the particulars of the principal part, as a check to alteration or forgery. The check or counterfoil parts remained in the hands of the banker, the portion given to the customer being termed a “drawn note” or “draft.” From the beginning of the 19th century the word “cheque” gradually became synonymous with “draft” as meaning a written order on a banker by a person having money in the banker’s hands, to pay some amount to bearer or to a person named. Ultimately, it entirely superseded the word “draft,” and has now a statutory definition (Bills of Exchange Act 1882, s. 73)—” a bill of exchange drawn on a banker payable on demand.” The word “draft” has come to have a wider meaning, that of a bill drawn by one person on another for a sum of money, or an order (whether on a banker or other) to pay money. The employment of cheques as a method of payment offering greater convenience than coin is almost universal in Great Britain and the United States. Of the transactions through the banks of the United Kingdom between 86 and 90% are conducted by means of cheques, and an even higher proportion in the United States. On the continent of Europe the use of cheques, formerly rare, is becoming more general, particularly in France, and to some extent in Germany.

* * *

1 The original meaning of “check” is a move in the game of chess which directly attacks the king; the word comes through the Old Fr. eschec, eschac, from the Med. Lat. form scaccus of the Persian shāh, king, i.e. the king in the game of chess; cf. the origin of “mate” from the Arabic shah-mat, the king is dead. The word was early used in a transferred sense of a stoppage or rebuff, and so is applied to anything which stops or hinders a matter in progress, or which controls or restrains anything, hence a token, ticket or counterfoil which serves as a means of identification, &c.

* * *