I. DEFINITION
A check that is presented for payment more than 6 months after its date.
A stale-dated check is still properly payable, however, the bank may dishonor the stale-dated check (without being considered wrongful dishonor).
II. COMMENT
See, U.C.C. § 4-404. Bank isn’t required to pay check, other than a certified check, presented for payment more than 6 months after its date. The bank has the option to pay a stale-dated check if it does so in “good faith.”
III. EXAMPLE
Farmer presents check payable to his order to be cashed. The teller notices the check is 12 months old but still cashes the check, not knowing whether the drawer wants it paid. When drawer finds that the check was paid, he demands his account be recredited, in that 4 months earlier, he reissued a check to Farmer after Farmer said check was lost. Should the bank recredit the account?
Discussion: Assume that the bank refused to recredit the account and the drawer sued. Under these set of facts, the drawer is likely to win the case. U.C.C. § 4-404 Comments state that the payment of a stale-dated check is made in “good faith” when the bank knows (acted honestly in fact) the drawer wants payment to be made. In this case the teller knew the check was stale but cashed it anyway without first checking whether the drawer wanted it paid. The teller probably cannot be considered to have acted in good faith.