Are you responsible for a bad check made to you if you cash it?

03/16/2007 - Category:Debts and Credit - Bad Checks - State: WA #1598

Full Question:

If you cash a check made out to you, from another party and a lending company cashes it, are you responsible, if the check bounces or the person who wrote the check?


A check has three original parties: the drawer, the drawee, and the payee. The drawer is the person who writes out and creates the check. If I write a check to you for $100, I am the drawer; you are the payee; and my bank is the drawee. The drawee is the person to whom the draft is addressed and who is ordered to pay the amount of money specified in the draft. This is a bank in most cases. The payee is the person named on the face of the paper to receive payment. On a check stating, "Pay to the order of John Jones," John Jones is the payee.

The owner of a check who signs the back of the paper is the endorser. The person to whom an endorsement is made payable is called the endorsee. The endorsee may in turn endorse the instrument to someone else for a debt and would then be an endorser.

The person who wrote the check to you is the drawer. The bank on which the check was drawn is the drawee. You are the payee. When you endorsed the check to the lending company (the endorsee), you became liable to the endorsee if the check bounced. The drawer is liable to you.

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03/16/2007 - Category: Bad Checks - State: WA #1598

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