Cheque are commonly used to facilitate bank transactions like withdrawals. But do you know that in law cheques serve two major purposes?
A document evidencing a particular transaction
A medium of payment
In cases where a particular transaction between two parties is to be proven, the cheque can be used as an evidence of the transaction between the parties. Also, when a cheque is issued to the drawee by the drawer, there is a financial obligation created, such that when the cheque is presented at the bank, it changes into physical cash for the drawee. That obligation is breached when the cheque is dishonored.
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