I live in the United States. I'd like to write a check to someone. I don't know the exact amount yet but I do know the upper bound. How can I write a check with no exact amount but with an upper bound?
2 Answers
The check is your commitment to pay to the order of the payee
the $amount
, signed by your hand.
Nothing else written on the check matters.
Your link refers to the NTE checks issued or received by the LA county, and the rules for these checks apply to the county itself, not the banks (source).
The Los Angeles County clerk (mirror) suggests one can write a check with no exact amount but with an upper bound by indicating a "Not To Exceed X USD" on the memo line of the check:
I don't know if this is legally binding.
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1This is not legally binding, same as "valid for XXX days" is not legally binding. If the check is presented, the bank will ignore this. Apr 25, 2022 at 4:05
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@littleadv thanks, you are welcome to convert your comment into an answer on law.stackexchange.com/q/79612/31 Apr 25, 2022 at 4:06
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1@littleadv: Assuming UCC 3-407 was adopted by the relevant jurisdiction: It is legally binding on the recipient, but not on the bank. Per UCC § 3-407, modifying an "incomplete instrument" (i.e., a check without the dollar amount filled in) without consent of the person who wrote it is illegal. Per 3-407-c, the bank can cash such checks, unless they realize the check was modified fraudulently. A teller who notices a violated NTE line probably should reject the check. However, more often than not the bank will ignore the memo line.– BrianApr 29, 2022 at 21:32