Practic case 1.

I’d just change point 2. Instead of What is an "Uniform Law"?

What is a ‘Uniform Law’?

2.Cheques

1. About practical case 1

Solving practical case 1

1. Differences between an EU Regulation and an EU Directive

A Regulation is binding for all EU Member States, in all its terms. It usually enters
into force 20 days after its publication in the Official Journal of the European Union. A
Directive establishes "fundamentals" and each country applies them in the form and
manner it considers.

2. What is a "Uniform Law"?

A "Uniform Law" is a law established through an international agreement, which
attempts to unify the laws of the various States.

3. What is the difference between a Law and a Royal Decree Law?

A law is elaborated by the Spanish legislative power (at the state level, "Las Cortes").
A Royal Decree Law is a regulation with the rank of law, but which has been
elaborated by the executive power, the Government.

3. Check/Cheque?
Check or cheque?
First of all, check is the American word, while the word cheque is used by the British English
people.
The cheque is a security, short-term credit document, which was widely used for many
years. Nowadays, its use in our country is quite limited since it has been replaced by the
bank transfer.

It is important to know the concept, the typology (personal and bank checks) and the
determination of the parties involved in commercial transactions with cheques (depending on
the type of cheque). THE REST IS OK.

4. Glossary (from now on)

Please tell me what words I should include that can help you. Let's collaborate.

Testing your skills 1

Which one is NOT an international means of payment?

3. Cheques (II)

2. Cheques
A cheque is a credit instrument, a security, by which the holder of a bank account at a
credit institution can issue a payment order to the credit institution to pay the amount
deposited to the beneficiary of the cheque from the funds available in his current
account. In the case of a bank cheque, the issuer is the credit institution itself, at the
request of its depositing client.

There are two types of cheque:

1. Personal cheque.
2. Bank cheque: conformed, guaranteed.

3. Parts in a cheque
Obverse (front side):

It is the essential part, where all the obligatory and usual elements of a check are
found:

Essential

1. The word "cheque", which must always appear.

2. The pure and simple command to pay ("Pay to...").
3. Identity of the bank that has issued the check book to be used by its
customer.
4. Date and place of issuance of the check.
5. Signature of the person giving the payment order, the bank account holder.

Not essential

6. Place of payment (location of the bank agency).

7. Series, type and document number (reference that individualizes the check).
8. IBAN number, identifying the account to which the amount of the check is to
be charged.
9. Blank band, to enter the data for optical reading and document scanning.

4. Cheques: personal cheque

The parties involved in the differents types of cheques are as follows:

 Parties involved in the personal cheque:
Drawer (librador): This is the person who orders the payment. It must always be the
holder of the bank account. Usually, when a company opens a bank account with a
bank, the latter offers it a chequebook for its use. Depending on the drawer’s deposit,
average balance, billing volume, etc., the bank may offer to guarantee payment of the
cheques the drawer issues, up to a certain amount.
Drawee (librado): This is always the credit institution (bank, savings bank, credit
union). The bank is only obliged to comply with the drawer's order if there are
sufficient funds in the account to make payment, or if it has guaranteed these
cheques up to a certain amount.

Holder or payee: This is the person to whom the cheque is issued. It is always
advisable for the document to state the identity with name and surname of this
beneficiary, although nothing prevents the document from being issued to the bearer,
so that it could be cashed by anyone who has it in their possession.

5. Cheques: Bank cheque

The parties involved in a banker's cheque, certified and guaranteed are as follows:

Drawer: In this type of cheque, the drawer is always a credit institution, which gives
the payment order from its own funds. This bank usually acts at the request of a
client (usually the importer), who is interested in offering a higher level of guarantee
with this type of cheque (remember that the personal cheque is only cashed if the
customer has funds). The bank guarantees the operation by withholding the amount
of the cheque from the balance of the paying customer's account.

Drawee: It is the same bank or another bank of which the exporter is a customer. The
drawee bank receives the cheque from the issuing bank and transfers the fixed
amount to the beneficiary’s account.

Holder or beneficiary: This is usually the exporter, the seller, who, in exchange for the
goods, is entitled to receive the agreed amount.

Practic case 2

Essential parts of a cheque:

Look at the attached image of a cheque and indicate the following:
1. Who is the drawer?
2. Who is the drawee?

3. What is the IBAN?

4. Who is the beneficiary?

5. What is the place of issue?

6. What does the diagonal stripe with the words "Y Cía....BBVA" mean?

4. Cheques (lll)

1. Practic case 2
Just change “which” for “what” in questions 3 and 5, as done before:
3. What is the IBAN?
5. What is the place of issue?
2. Common clauses
The most common clauses in a cheque are:
- Guarantee ("aval"): It is possible to guarantee a cheque. A person (guarantor)
guarantees the fulfillment of the payment. This clause can be written on the back of
the cheque.
- Endorsement ("endorso"): This is the possibility of transferring the right of collection
to another person. It can also be written on the back of the cheque.
3. At sight
Cheques are payable at SIGHT (“A la vista”), so they can be cashed on any date
regardless of the date that appears on the cheque.
4. Principles of legal regulation
“Ley cambiaria y del cheque”
Article 118: Establishes that it is the drawer who guarantees the payment of a
check.
Article 134: Emphasises that the cheque is a document payable "at sight" (It can
be cashed immediately regardless of the date)
Article 142: Payment of a cheque drawn in a foreign currency shall be made in
that currency and only if this is not possible, in euros.
Checkbooks can be provided by any credit institution.
"Uniform Cheque Law" (Geneva)
Article 6: Provides the possibility for the drawer to issue a cheque to
himself/herself.
Article 9: In case of discrepancy between figures and letters, the amount written
in letters shall always prevail.
 Article 21: The holding of a bearer cheque by a person is presumed to be in good
faith, so that whoever wishes to challenge it must prove the existence of bad
faith.
Spanish tax regulation:
Real Decreto Ley 24/2021 establishes measures for the prevention and fight
against fraud, including limitations on cash payments (1.000€)

Practic case 3
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Final Quiz (Cheques)