The parties to a cheque are the drawer, the payee, and the drawee bank.
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The Drawer: The drawer is the person who writes the cheque and is usually the account holder who authorizes the payment. The drawer directs the drawee bank to pay the specified amount to the payee.
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The Payee: The payee is the person or entity to whom the payment is to be made. They are the recipient of the amount specified on the cheque and are entitled to receive the payment from the drawee bank.
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The Drawee Bank: The Drawee bank is the financial institution where the drawer has an account, and where the cheque is drawn from. The drawee bank is responsible for processing and honoring the cheque, and ensuring that there are sufficient funds in the drawer’s account to cover the payment.
In addition to these three parties, there may also be a holder of the cheque, who is the person or entity who possesses the physical cheque and is entitled to cash or deposit it. The holder of the cheque may be the payee or a third party who has received the cheque as payment.
It’s important for all parties involved in a cheque transaction to carefully review and understand the terms of the agreement before signing or endorsing the cheque. If you have any questions or concerns, it’s advisable to seek the advice of a legal or financial professional.
