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A check, also known as a cheque, is a written document that instructs a bank to transfer a specific amount of money from the writer's account to the payee's account. Checks typically include the date, the payee's name, and the amount of money to be transferred. The writer of the check also signs the check to authorize the transfer. In order for the check to be processed, it must be deposited or cashed by the payee.
A bill, on the other hand, is a document that requests payment for goods or services that have been received. Bills typically include the name and address of the company or individual issuing the bill, the name and address of the person or company being billed, a description of the goods or services provided, and the total amount due.
Both checks and bills are types of financial instruments that are used to facilitate transactions between different parties. While checks are used to transfer money from one party to another, bills are used to request payment for goods or services that have already been provided.
In Australia, the law regarding checks and bills is governed by the Cheques and Payment Orders Act 1986 and the Bills of Exchange Act 1909. These acts set out the legal framework for the use and handling of checks and bills in the country.
Under the Cheques and Payment Orders Act, a cheque is considered a legally binding instrument and the bank is required to pay the amount written on the cheque, provided that the account has sufficient funds. If a cheque is dishonored, that is, the bank refuses to pay due to insufficient funds in the account, the person who wrote the cheque may be liable for civil action.
The Bills of Exchange Act 1909 deals with the handling of bills of exchange, which is a type of negotiable instrument that requires a person to pay a certain sum of money to another person or at a certain time or on demand. The act sets out the rights and responsibilities of the parties involved in a bill of exchange, including the drawer, the drawee, and the payee.
It's also important to note that the Electronic Transactions Act 1999 and the associated regulations also apply to electronic cheques, electronic bills and other electronic payment instruments.