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ARTICLE · 20 SEPTEMBER 2021

Can A Cheque Bounce After It Has Been Cleared?

Dr Hassan Elhais
Dr Hassan Elhais
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Dr Hassan Elhais

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A returned cheque can invite both civil and criminal liabilities on an individual pursuant to the UAE laws.

United Arab EmiratesFinance and Banking
Hassan Elhais
Hassan Elhais

A returned cheque can invite both civil and criminal liabilities on an individual pursuant to the UAE laws. Therefore, it is very important, that UAE residents are well aware of the responsibilities in financial transactions including the potential risks.

Federal Decree-Law No. (14) of 2020 Amending Certain Provisions of the Federal Law No. (18) of 1993 'Concerning the Commercial Transaction Law' ('New decree'), states that:

Article (600):

  1. Acceptance does not apply to cheques. Any wording of acceptance written on a cheque shall be null and void.
  2. The drawee of a cheque may initial the cheque for approval. Such approval shall confirm the availability of sufficient fund with drawee to pay the value of the cheque as on the date of initialing. The signature of drawee on the face of the cheque shall constitute an approval.

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