G. Bradley Hargrave
Stale Checks
A "stale check" is one which is presented for payment more than six months after its date. UCC Section 4-404 states that "a bank is under no obligation to ...pay a [stale] check, other than a certified check, ...but it may charge its customerís account for a payment made thereafter in good faith." In other words, banks are free to deny payment of a stale check, yet are exempt from liability to their customer if they do make payment, provided they act in good faith.
This UCC section suggests a general distrust of stale checks while recognizing that there may be certain instances in which their payment is proper. The critical issue for determining the bankís liability for its payment decision is its "state of mind"; that is, whether it acts in good faith when paying the stale check.
Good faith in this context is notoriously difficult to define. However, a majority of commentators agree that a bank which pays a stale check in the normal course of business, and without actual knowledge of the checkís date, will be free from liability to its customer. Conversely, a bank will be found to have acted in bad faith should a bank employee discover the date and permit the check to be paid nevertheless without first contacting the drawer.
As a practical matter, it is very unlikely that any bank employee will discover a stale check. Therefore, check writers who wish to protect their accounts from payment of a stale item are well advised to issue a stop payment order on any check which remains uncashed more than six months after its issuance.
