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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
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Experience:  30 years of corporate, litigation and international law
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I accepted a $600 check payable to cash drawn on Valley National

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I accepted a $600 check payable to cash drawn on Valley National Bank, a NJ bank. I visited a VNB branch, asked the teller to confirm that funds in the acct were adequate and received an affirmative answer. But VNB refused to cash the check despite my providing good identification citing my not having a VNB account. My questions here are theoretical, not practical, and I would like a technical legal answer please. As a matter of principle, I do not think banks are on firm legal ground refusing to cash a check made out to cash drawn on that bank. Am I not a correct that the check represents a contract between the bank and its customer to make good on the promise to pay? When a customer makes a check to "cash" a promise to pay to the bearer is created, no? If the customer has signed the check (assuming signature is not forged), how can the bank have a "security" issue to its customer that allows it to abrogate the promise to pay? Why is a check not a legally binding contract?
You are technically correct. However, the bank is not obligated to honor the check immediately. It has 24 hours or one business day to determine whether it will honor the check or not. You do not need to have an account at the bank. The bank's relationship is with its customer, not the payee of the check. If the bank dishonors the check, it has breached its contract with its customer. On the other hand, the failure to honor constitutes a breach of contract between the customer and you, the payee.
Customer: replied 7 years ago.
Thank you. Mind clarifying the status of the pay to "cash" please? Does the bank have a legal right to demand lots of identification from the cash-er? Shouldn't any bearer of a "payable to cash" check have the right to its promise to pay (within 24 hours)? What is the legal rationale, if any, for the identification in the case of payable to cash?

Making something payable to cash is the same as making it payable to the bearer. You actually do not need indentification. Neither are you required to endorse the check. The 24 hours gives them time to check with their customer to make sure the check is to be honored.


Normally banks seek identification to know with whom they are dealing. However, most tellers do not know the actual legal requirements and this leads to many erroneous assertions, such as you have to have an account at the bank or you must endorse the check.

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