Cheque – Bill of Exchange: In a cheque, the drawer is the debtor and the holder is the creditor. In a bill of exchange, the drawee is the debtor and the drawer is the creditor.

Cheque

In a cheque, the drawer is the debtor of the claim arising from the cheque, and the holder is the creditor of the claim. The drawer instructs his bank to pay the holder of the cheque the amount stated, by withdrawal from the drawer’s bank account. The holder may transfer his claim from the cheque to a third party, most commonly by endorsement. The endorsee becomes the new holder of the cheque. If there are available funds in the drawer’s account, the holder presents the cheque to the bank and receives the amount. If there are no available funds in the drawer’s account, the cheque will not be paid, will be stamped (dishonoured), and the holder may proceed for payment against the drawer, the endorsers and the guarantors. In turn, each endorser and guarantor who paid the cheque may proceed against his preceding endorsers or guarantors, and against the drawer. The bank cheque has specific conditions of validity. If the bank cheque is invalid, the limitation period and the methods of claiming the amount differ. Only cheques meeting the requirements of Article 1 of Law 5960/1933 are considered bank cheques (and not, for example, the postal cheque Legislative Decree 404/1974).

Conditions of capacity to assume obligation from a cheque

If a person is capable of assuming an obligation from a legal transaction, he is capable of assuming an obligation from a cheque Article 58 of Law 5960/1933. If a person is incapable of assuming an obligation from a legal transaction because he is a minor, but has complied with the formalities of the law concerning the acquisition of capacity to perform commercial acts, he is not incapable of assuming an obligation from a cheque on that ground alone Article 58 para. 1 sent. 2 of Law 5960/1933. The capacity to assume an obligation from a legal transaction is judged by reference to the actual time of issuance of the cheque, and not by reference to the time of antedating or postdating 1249/1989 Thessaloniki Court of Appeals. The capacity to assume an obligation from a legal transaction is governed, for the person assuming the obligation from the cheque, by the domestic law of that person Article 70 sent. 1 of Law 5960/1933. If that law declares applicable the law of another country, the law of the other country applies Article 70 sent. 2 of Law 5960/1933. If the person is incapable under the law applicable as above, but capable under the law of the country in whose territory he signed, his obligation is not invalid on that ground alone Article 70 sent. 3 of Law 5960/1933. The question of upon which persons a cheque may be drawn is governed by the law of the country in which the cheque is payable Article 71 sent. 1 of Law 5960/1933. If the cheque is invalid under the law of the country of payment because of the person upon whom it was drawn, and from the cheque another person also assumed an obligation by signing it in another country, and the law of that country does not contain the corresponding provision for invalidity of the cheque on account of the person upon whom it was drawn, the obligation of the other person is not invalid on that ground alone Article 71 sent. 2 of Law 5960/1933. The cheque may be drawn in a country other than the United States, but be payable in the United States 4001/2002 Athens Multi-Member Court of First Instance. The form of the obligation arising from the cheque is governed by the law of the country in whose territory the obligation was assumed by signature Article 72 sent. 1 of Law 5960/1933. If the assumption of the obligation is invalid due to formal defect under the law of the country in whose territory the obligation was assumed by signature, but the assumption of the obligation is formally valid under the law of the country of payment, the obligation is not invalid on that ground alone Article 72 sent. 2 of Law 5960/1933. If the obligation assumed by the signature is invalid under the law of the country in whose territory the obligation was assumed by signature and under the law of the country of payment, but valid under the law of the country in which a subsequent obligation was assumed by signature, the subsequent obligation is not invalid on that ground alone Article 72 sent. 3 of Law 5960/1933. The effects of the obligation assumed from the cheque by signature are governed by the law of the country in whose territory the obligation was assumed by signature Article 73 of Law 5960/1933. The time-limits for bringing an action are regulated for all signatories by the law of the country where the cheque was drawn Article 74 of Law 5960/1933. The form and time-limits of the protest, and the form of every act necessary for the exercise or preservation of a right under the cheque, are governed by the law of the country in whose territory the protest is drawn up or where each act is performed respectively Article 76 of Law 5960/1933. The provisions of civil procedural law concerning bills of exchange also apply to cheques Article 77 of Law 5960/1933. Whether the cheque is necessarily payable on sight or whether it may be drawn on a term from sight is governed by the law of the country of payment Article 75 item 1 of Law 5960/1933. The effects of postdating are governed by the law of the country of payment Article 75 item 1 of Law 5960/1933. The time-limit for presentation is governed by the law of the country of payment Article 75 item 2 of Law 5960/1933. Whether the cheque can be accepted, certified, confirmed or visa-ed, and the relevant effects, are judged under the law of the country of payment Article 75 item 3 of Law 5960/1933. Whether the holder may demand partial payment or is obliged to accept partial payment is governed by the law of the country of payment Article 75 item 4 of Law 5960/1933. Whether the cheque may be crossed and the effects of crossing are governed by the law of the country of payment Article 75 item 5 of Law 5960/1933. Whether the cheque may contain the clause “account only” or an equivalent and the effects of such clause are governed by the law of the country of payment Article 75 item 5 of Law 5960/1933. Whether the holder of the cheque has special rights upon the cover and the nature of those rights is governed by the law of the country of payment Article 75 item 6 of Law 5960/1933. Whether the drawer may revoke the cheque or oppose its payment is governed by the law of the country of payment Article 75 item 7 of Law 5960/1933. The measures that may be taken in the event of loss or theft of the cheque are governed by the law of the country of payment Article 75 item 8 of Law 5960/1933. Whether the protest or equivalent declaration is necessary for the preservation of the right of recourse against the endorsers, the drawer and the other obligors is governed by the law of the country of payment Article 75 item 9 of Law 5960/1933. If the provisions on stamp duty of the cheque are not observed, the validity of the rights and obligations from the cheque is not affected Article 78 sent. 1 of Law 5960/1933. If the provisions on stamp duty of the cheque are not observed, the exercise of rights from the cheque is suspended until the cheque is lawfully stamped through payment of the lawful stamp duty and the lawful fines Article 78 sent. 2 of Law 5960/1933.

Conditions of validity

For a cheque to be valid, the following must be stated:

• The word “Cheque” in the body of the document Article 1 element 1 of Law 5960/1933. If the cheque is drawn up in a foreign language, the corresponding foreign word suffices Article 1 para. 1 sent. 2 of Law 5960/1933.
• A simple and unconditional order to pay a specified sum of money Article 1 element 2 of Law 5960/1933. If there is a discrepancy between the amount written in words and the amount written in figures, the amount in words prevails Article 9 para. 1 of Law 5960/1933. If more than one amount is stated, whether in figures or in words, and they differ, the smaller amount prevails Article 9 para. 2 of Law 5960/1933. If the cheque is payable in foreign currency that is not in circulation at the place of payment, the rules of Article 36 of Law 5960/1933 are followed.
• The name of the drawee bank Article 1 element 3 of Law 5960/1933. The drawee is usually a bank, but may also be a legal person of public law that performs banking services (postal savings banks, deposit and loans fund) Article 3 para. 2 of Law 5960/1933Article 54 of Law 5960/1933. The drawee and the drawer may be the same person only if it concerns different branches of the same bank Article 6 para. 3 of Law 5960/1933
• Place of payment Article 1 element 4 of Law 5960/1933. If the place of payment is missing, it is supplied by the place stated next to the name of the drawee Article 2 para. 2 sent. 2 of Law 5960/1933, and if more branches of the drawee are stated, by the first of them Article 2 para. 2 sent. 2 of Law 5960/1933. If none of the aforementioned places exists, the place of payment is supplied by the place of issuance Article 2 para. 3 of Law 5960/1933. The residence of the third party, or the registered seat of the drawee, or another place if the third party is a bank, may be designated as the place of payment Article 8 of Law 5960/1933.
• Place of issuance Article 1 element 5 of Law 5960/1933. The cheque is invalid if neither the place of issuance nor a place next to the name of the drawer is stated Article 2 para. 1 of Law 5960/1933Article 2 para. 4 of Law 5960/1933. If only the place of issuance is missing, it is supplied by the place stated next to the name of the drawer Article 2 para. 4 of Law 5960/1933.
• Date of issuance Article 1 element 5 of Law 5960/1933. Postdating Article 29 sent. 4 of Law 5960/1933 and antedating are permitted. If the cheque was drawn between two places with different calendars, the date of issuance is taken to be the date according to the calendar of the place of payment Article 30 of Law 5960/1933
• Signature of the drawer Article 1 element 6 of Law 5960/1933. The drawer need not be the beneficiary of the bank accounts stated on the cheque AP 1098/2008Article 3 para. 1 of Law 5960/1933.
• Timely presentation of the cheque, according to the prevailing view in case-law. The cheque has eight days as a time-limit for presentation to the bank from the day stated as the date of issuance Article 29 para. 4 of Law 5960/1933. (for cheques drawn and payable in the same country Article 29 para. 1 of Law 5960/1933, twenty days for cheques drawn and payable in the same continent Article 29 para. 2 item 1 of Law 5960/1933 and seventy days for cheques drawn in one continent and payable in another continent Article 29 para. 2 item 2 of Law 5960/1933. A cheque drawn in a country of Europe and payable in a country of the Mediterranean or vice versa is considered to be drawn and payable in the same continent Article 29 para. 3 of Law 5960/1933. Presentation is made only on a working day Article 55 para. 1 of Law 5960/1933. The eight-day time-limit is extended to the next working day if the last day of presentation is a legal holiday (Sunday, days of full holiday for Public Offices or Banks Article 62 of Law 5960/1933) Article 55 para. 2 of Law 5960/1933. The time-limit for presentation is also extended when it is hindered due to insurmountable impediment, force majeure or a provision of law of any state Article 48 para. 1 of Law 5960/1933. If force majeure lasts more than 15 days from the day on which the holder notified his endorser of the force majeure, he may exercise recourse even without presentation, certification or protest Article 48 para. 4 of Law 5960/1933. Purely personal events of the holder or of the agent for the presentation of the cheque or drawing up of the certification do not constitute force majeure Article 48 para. 5 of Law 5960/1933.

Failure to present the cheque in time has the following consequences:

• the cheque becomes invalid, according to one view, and
• the holder loses his rights of recourse Article 40 item 2 of Law 5960/1933, and
• the drawer acquires the right to revoke the cheque Article 32 para. 1 of Law 5960/1933, and
• the endorsement of an order cheque now has the effect of an assignment.

With the revocation of the cheque, the bank has instructions from its client not to pay the cheque. After agreement between the drawer and the payee for completion of specific elements at a later time, the cheque may be issued without stating some of the above elements. Such a cheque is called a blank cheque Article 13 of Law 5960/1933. If any of the conditions of validity is missing, beyond those agreed for a blank cheque, the cheque is invalid Article 2 para. 1 of Law 5960/1933.

What the cheque is not required to contain

Indicatively, the cheque is not required to include:

• the bank account number of the drawer, or
• an expiration date, or
• the name of the payee, or
• a standardised document form per bank. The cheque may also be issued without a chequebook, although this is not customary in order to avoid forgery / invalidity.

Stamping (dishonour) of a cheque

If there are no available funds in the drawer’s account when the holder presents the cheque, the bank is obliged to certify the non-payment of the cheque. This certification is usually made by stamp, and the stamping is made either on the body of the cheque or on a separate document, and the day of presentation of the cheque is noted Article 2 of Legislative Decree 1325/1972. The certification also includes the authorisation from one bank to another, where the bank that is to stamp the cheque is different from the drawee Article 88 para. 1 of Law 1969/199132/2010 Rhodes Single-Member Court of First Instance. The consequences of the stamping of a valid cheque, for the drawer, are:

• The drawer is registered in Tiresias. The registration will be made by the bank that stamped the cheque. If, on the basis of the cheque, the holder issues a payment order against the drawer, the registration will also be made by the registry of the court that issued the payment order.
• The drawer has increased chances of rejection of credit applications from banks, due to his registration in Tiresias.
• The drawer is criminally liable for the issuance of a bounced cheque.
• The drawer is liable to pay the amount of the cheque to the holder, as well as compensation for the tort of issuing a bounced cheque Article 914 of the Civil Code (AK).

The consequences of the stamping of a valid cheque, for the holder, are:

• The holder is entitled to file a criminal complaint against the drawer of the cheque for the issuance of a bounced cheque Article 79 para. 5 of Law 5960/1933Article 15 para. 3 of Law 3472/2006. The criminal complaint for the issuance of a bounced cheque must be filed within 3 months from the day of stamping, if the holder learnt thereby of the bouncing of the cheque Article 117 para. 1 of the Penal Code (PK).
• The holder is entitled to claim the amount of the cheque from the drawer, the endorsers who placed their signature before the holder, and the guarantors. He may claim this amount either by payment order or by lawsuit. At the same time, in order to secure his claim, he may proceed against the said debtors with an application for interim measures to prevent the transfer of their assets.
• The holder is entitled to claim damages from the drawer due to the tort of issuing a bounced cheque Article 914 of the Civil Code (AK).

The consequences of the stamping of a valid cheque, for the obligor by recourse who paid the cheque and became holder, are:

• The holder is entitled to file a criminal complaint against the drawer of the cheque for the issuance of a bounced cheque Article 79 para. 5 of Law 5960/1933Article 15 para. 3 of Law 3472/2006. The criminal complaint for the issuance of a bounced cheque must be filed within 3 months from the day on which the holder learnt of the bouncing of the cheque Article 117 para. 1 of the Penal Code (PK).
• The holder is entitled to claim the amount of the cheque from the drawer, the endorsers who placed their signature before the holder, and the guarantors. He may claim this amount either by payment order or by lawsuit. At the same time, in order to secure his claim, he may proceed against the said debtors with an application for interim measures to prevent the transfer of their assets.
• The holder is entitled to claim damages from the drawer due to the tort of issuing a bounced cheque Article 79 para. 5 sent. 2 of Law 5960/1933Article 15 para. 3 of Law 3472/2006Article 914 of the Civil Code (AK).

Valid cheque

Types of cheque – Methods of transfer

The drawer, as the author of the cheque, regulates how easy the transfer of the cheque is, by inserting clauses on its body and naming the payee. Although alteration of the type of cheque after issuance is not permitted, the blank endorsement of an order cheque renders it functionally equivalent to a bearer cheque.

Order cheque

An order cheque is:

• a cheque that names the payee and bears the clause to order Article 5 para. 2 item 1 of Law 5960/1933, or
• a cheque that names the payee and does not bear the clauses to order, not to order and to bearer Article 5 para. 2 item 1 of Law 5960/1933Article 5 para. 2 item 2 of Law 5960/1933Article 5 para. 2 item 3 of Law 5960/1933Article 5 para. 3 of Law 5960/1933.

The cheque may also be issued to the order of its drawer Article 6 sent. 1 of Law 5960/1933, with the clause to my own order.

Transfer by endorsement

The order cheque is transferred by endorsement Article 14 para. 1 of Law 5960/1933. For the endorsement to be valid, the endorser must have capacity for legal transactions Article 58 of Law 5960/1933. By the endorsement,

• the endorser transfers all his rights from the cheque to the endorsee Article 17 para. 1 of Law 5960/1933, and
• the endorser undertakes liability for payment of the cheque towards the endorsee and every subsequent beneficiary Article 18 para. 1 of Law 5960/1933.

The endorsement is unconditional and unqualified Article 15 para. 1 sent. 1 of Law 5960/1933. Conditions on the endorsement are not valid Article 15 para. 1 sent. 2 of Law 5960/1933. Partial endorsement is invalid Article 15 para. 2 of Law 5960/1933. Endorsement by the bank is also invalid Article 15 para. 3 of Law 5960/1933. The endorsement may also be made to the drawer and any other obligor Article 14 para. 3 sent. 1 of Law 5960/1933, and they may endorse the cheque again. Endorsement to the drawee is valid only as a discharge Article 15 para. 5 sent. 1 of Law 5960/1933, except where it is made by a branch of the drawee to another branch thereof, other than the one that issued the cheque Article 15 para. 5 sent. 2 of Law 5960/1933.

Endorsement to a specific person

The payee or the lawful holder of the cheque may endorse it to a specific person Article 16 para. 1 of Law 5960/1933Article 16 para. 2 sent. 1 of Law 5960/1933. The endorser must

• sign on the cheque or the allonge Article 16 para. 1 sent. 2 of Law 5960/1933, and
• write the name of the endorsee Article 16 para. 1 of Law 5960/1933Article 16 para. 2 sent. 1 of Law 5960/1933.

If he endorses it to bearer, the endorsement is deemed to be in blank Article 15 para. 4 of Law 5960/1933.

Blank endorsement

The payee or the lawful holder of the cheque may endorse it without specifically defining who the lawful holder will be. Such endorsement is called blank endorsement Article 16 para. 2 sent. 1 of Law 5960/1933. The endorser must

• • sign on the back of the cheque or on the allonge Article 16 para. 2 sent. 2 of Law 5960/1933, and
  • not write a name for the endorsee Article 16 para. 2 sent. 1 of Law 5960/1933

  , or

  • endorse the cheque to bearer Article 15 para. 4 of Law 5960/1933, and
  • sign on the cheque or on the allonge Article 16 para. 1 sent. 2 of Law 5960/1933.

The holder of a cheque endorsed in blank may fill in his own name in the place of the endorsee Article 17 para. 2 element 1 of Law 5960/1933. The holder of a cheque endorsed in blank may transfer the cheque

• by naming on the cheque another person as endorsee Article 17 para. 2 element 1 of Law 5960/1933, or
• by endorsement (blank or otherwise) of the cheque Article 17 para. 2 element 2 of Law 5960/1933, or
• by handing over the cheque as is to another Article 17 para. 2 element 3 of Law 5960/1933.

Clauses in the endorsement

Value for collection, Value in cover, Value for credit

This clause is in practice equivalent to endorsement for discounting (check discounting). The endorser deposits the cheque with the bank, instructing it to collect the cheque 3278/2009 Athens Court of Appeals. The bank must take care of the demand for payment of the cheque, as agent of the endorser. If the cheque is paid, the bank credits the value of the cheque to the endorser’s account. If the cheque is not paid, the bank has the right to claim back the amount possibly discounted, and indeed with interest from the time at which the endorser was supposed to seek payment, or from the demand 177/2007 Larissa Court of Appeals. In practice, the endorser may take back the cheque from the bank after returning the discounted amount, either by cash payment or by debiting his account. He may also take back the cheque if the claim is re-secured with a guaranteeing instrument, such as cheques, postdated or otherwise (check rediscounting).

By way of power of attorney, By proxy

The endorser hands over the cheque to the endorsee, but remains the beneficiary of the cheque and its last lawful holder AP 1915/2008. The endorsee, whether a natural person or a bank, acts as the agent of the endorser, with instructions to exercise the rights from the cheque in the name of the endorser Article 23 para. 1 of Law 5960/1933Article 23 para. 3 of Law 5960/1933214/2007 Patras Court of Appeals. The reference in the endorsement “pay to the order of (Bank’s name) for credit to the account of (beneficiary’s name)” is also considered as endorsement by way of power of attorney AP 2060/2007. An endorsement without the relevant clause may also operate as endorsement by way of power of attorney, by mere agreement of the parties. Such endorsement is called covered endorsement by way of power of attorney, and needs to be proved before the court AP 2011/2009. The agent bank may endorse the cheque only by way of power of attorney 214/2007 Patras Court of Appeals. The relevant mandate is not terminated by the death of the endorser or his subsequent incapacity Article 23 para. 3 of Law 5960/1933. The relevant clause or an equivalent one entailing a mandate may be inserted by the lawful holder of an order cheque Article 23 para. 1 of Law 5960/1933Article 14 para. 1 of Law 5960/1933Article 14 para. 2 of Law 5960/1933Article 5 para. 2 item 1 of Law 5960/1933Article 5 para. 2 item 3 of Law 5960/1933Article 5 para. 3 of Law 5960/1933. The clause must be covered by the endorser’s signature 132/2003 Dodecanese Court of Appeals. The obligors may raise against the holder bank only those defences that they could raise against the endorser Article 23 para. 2 of Law 5960/193310460/2008 Thessaloniki Multi-Member Court of First Instance.

Value as pledge, Value in pledge

By this clause the holder hands over the cheque to the bank, and receives the value of the cheque. The bank becomes a pledgee creditor of the cheque Article 1244 of the Civil Code (AK)Article 1251 of the Civil Code (AK) and its last lawful holder Article 1255 of the Civil Code (AK)1787/2012 Athens Court of AppealsArticle 17 sent. a of Law 5960/1933Article 18 of Law 5960/193339/2005 Livadia Single-Member Court of First Instance10460/2008 Thessaloniki Multi-Member Court of First Instance. If the cheque is paid, the bank receives the money from the debtor. If the cheque is not paid, the pledgee bank usually turns to its pledging client, and either claims the money from him, or agrees to hand over the cheque to him after the claim is re-secured with a new, substitute guaranteeing instrument (e.g. a new cheque). In endorsement by way of pledge, the obligor may raise against the bank only those defences that he has against it. He may raise the defences that he has against its preceding endorsers and the drawer only if the bank, upon acquisition of the cheque, acted knowingly to his detriment 10460/2008 Thessaloniki Multi-Member Court of First Instance.

Without my liability

The endorser is not liable for payment Article 18 para. 1 of Law 5960/1933. This clause is not valid as regards the drawer of the cheque Article 12 para. 2 of Law 5960/1933.

Not transferable

The endorser is not liable towards subsequent endorsers Article 18 para. 2 of Law 5960/1933

Transfer of an order cheque by assignment

An endorsement made after the expiry of the time-limit for presentation or after the bank’s certification of non-payment (or the drawing up of a protest) Article 24 para. 1 of Law 5960/1933 operates as an assignment. If the endorsement does not bear a date, it is presumed to have been made before the above events Article 24 para. 2 of Law 5960/1933.

Bearer cheque or anonymous cheque

A bearer or anonymous cheque is:

• a cheque that does not name the payee Article 5 para. 4 of Law 5960/1933
• a cheque that names the payee with the clause to bearer or an equivalent Article 5 para. 3 of Law 5960/1933

Transfer of a bearer cheque by agreement and delivery

The transfer is made by agreement and delivery, not by endorsement, with the consequence that the intermediate acquirers are not liable, but only the drawer. Any endorsement merely operates so that the endorser is liable as obligor by recourse, and does not change the type of cheque Article 20 of Law 5960/1933.

Transfer of a bearer cheque by assignment

Nominative cheque

By stating the name of the payee and the clause not to order, the cheque becomes nominative Article 5 para. 2 item 2 of Law 5960/1933

Transfer of a nominative cheque by assignment

The nominative cheque is transferred by assignment, not by endorsement Article 14 para. 2 of Law 5960/1933. For the validity of the transfer by assignment, notification to the debtor is required. The notification may be made by note on the title, by service of the lawsuit pleading or by service of the payment order.

Pledging of a cheque

The holder of the cheque may transfer the cheque by way of pledge to a third party, even informally, that is, by endorsement of the cheque and delivery thereof to the third party 340/2002 Patras Court of Appeals. The endorsement for pledging may be made either by inserting the clause “value as pledge” upon endorsement, or without the relevant clause, by mere endorsement and delivery of the cheque to the creditor 340/2002 Patras Court of Appeals.

Recourse

Conditions for exercising recourse

For the holder to exercise recourse against the drawer Article 40 para. 1 item 2 of Law 5960/1933, the endorsers Article 40 para. 1 item 1 of Law 5960/1933 and the guarantors Article 40 para. 1 item 1 of Law 5960/1933Article 27 para. 1 of Law 5960/1933, the cheque must be presented in time Article 40 para. 1 of Law 5960/1933, must not be paid Article 40 para. 1 of Law 5960/1933, and the refusal of payment must be certified Article 34 para. 1 of Law 5960/1933. The certification of non-payment may be made:

• By the bank, by a dated declaration written on the cheque, stating the day of presentation Article 40 para. 1 element 2 of Law 5960/1933
• By a clearing house, by a dated declaration certifying that the cheque was timely delivered and not paid Article 40 para. 1 element 3 of Law 5960/1933
• By a notary public, by a public document, the protest Article 40 para. 1 element 1 of Law 5960/1933.

The protest is drawn up by a notary public, without the involvement of witnesses, at the place of payment Article 63 para. 1 of Law 5960/1933. Only one protest is drawn up even if there are multiple drawees Article 63 para. 2 of Law 5960/1933. The protest includes:

• a copy of the cheque Article 63 para. 3 sent. 1 of Law 5960/1933, except where it has been lost Article 63 para. 4 of Law 5960/1933, and
• the notary’s invitation to pay Article 63 para. 3 element a of Law 5960/1933, and
• a statement as to whether or not the drawee appears Article 63 para. 3 element b of Law 5960/1933, and
• any reasons for refusal of payment declared by him Article 63 para. 3 element c of Law 5960/1933.

The relevant certifications are made only on a working day Article 55 para. 1 of Law 5960/1933, always before the expiry of the time-limit for presentation Article 41 para. 1 of Law 5960/1933, or at most by the first working day following the presentation if it was made on the last day of the time-limit Article 41 para. 2 of Law 5960/1933. If the last day for presentation is a legal holiday (Sunday, days of full holiday for Public Offices or Banks) Article 62 of Law 5960/1933, the time-limit is extended until the next working day Article 55 para. 2 of Law 5960/1933. The time-limit for drawing up the certification or the protest is extended when it is hindered due to insurmountable impediment, force majeure or a provision of law of any state Article 48 para. 1 of Law 5960/1933. If force majeure lasts more than 15 days from the day on which the holder notified his endorser of the force majeure, he may exercise recourse even without presentation, certification or protest Article 48 para. 4 of Law 5960/1933. Purely personal events of the holder or of the agent for the presentation of the cheque or drawing up of the certification do not constitute force majeure Article 48 para. 5 of Law 5960/1933.

Limitation of the claim of a timely presented cheque

The actions of the holder against the obligors are barred by limitation after six months from the expiry of the time-limit for presentation Article 52 para. 1 of Law 5960/1933. The recourse actions of the obligor who paid the cheque are barred by limitation after six months from the payment of the cheque by him Article 52 para. 2 item 1 of Law 5960/1933 or from the day on which an action was brought against him Article 52 para. 2 item 2 of Law 5960/1933. The claim from the cheque is barred by limitation if the payment order does not become final after the service of the payment order and before the expiry of the limitation period 928/1994 Piraeus Court of Appeals6445/1999 Thessaloniki Single-Member Court of First Instance (interim measures). However, the service of an order to pay under an enforceable copy interrupts the limitation 7968/2013 Thessaloniki Single-Member Court of First InstanceArticle 264 of the Civil Code (AK) and a new limitation period starts running from the day after service 99/2002 Dodecanese Court of Appeals. The interruption of limitation is effective only against the person in respect of whom the event interrupting limitation took place Article 53 of Law 5960/1933. The factual circumstances that interrupt and suspend limitation are set out in the provisions on limitation and short limitation of the Civil Code (AK) Article 61 of Law 5960/1933. If the recourse from the cheque is barred by limitation, the holder and any beneficiary may bring an action of unjust enrichment against the drawer or the endorsers Article 60 para. 1 of Law 5960/1933. The above action of unjust enrichment is barred by limitation after five years from the date of issuance of the cheque Article 60 para. 2 of Law 5960/1933. After the limitation of the cheque, conversion of it into a debt instrument and issuance of a payment order on its basis is inadmissible 43/2005 Ioannina Court of Appeals.

Rights of the last holder

The cheque is payable on sight Article 28 para. 1 sent. 1 of Law 5960/1933. The last holder may sue the drawer Article 12 para. 1 of Law 5960/1933, the endorsers Article 17 para. 1 of Law 5960/1933 and the guarantors Article 27 para. 1 of Law 5960/1933 for payment of the cheque that was not paid by the bank Article 44 para. 2 of Law 5960/1933. The above are jointly and severally liable Article 44 para. 1 of Law 5960/1933. The holder may sue, individually or collectively, whichever obligors he wishes, in any order, regardless of the order of endorsement Article 44 para. 2 of Law 5960/1933Article 44 para. 4 of Law 5960/1933, demanding the amount of the cheque, the lawful interest and his costs Article 45 para. 1 of Law 5960/1933Article 45 para. 2 of Law 5960/1933. The holder of an unpaid cheque is entitled to demand:

• the amount of the cheque, and
• interest on the amount of the cheque from the day of presentation 4/2010 Rhodes Single-Member Court of First Instance, and
• the costs required for the certification or the protest, the costs of notification of the signatories under Article 42, and the remaining costs.

Cheques drawn and payable in Greece bear interest at the general default rate, every other cheque at 6%. The holder of a cheque is considered the lawful holder if the cheque bears an uninterrupted series of endorsements, even if the last endorsement is in blank Article 19 para. 1 sent. 1 of Law 5960/1933Article 14 para. 1 of Law 5960/1933Article 14 para. 2 of Law 5960/1933Article 5 para. 2 item 1 of Law 5960/1933Article 5 para. 2 item 3 of Law 5960/1933Article 5 para. 3 of Law 5960/1933Article 20 of Law 5960/1933. Crossed-out endorsements do not interrupt the above series of endorsements Article 19 para. 1 sent. 2 of Law 5960/1933. The endorser following a blank endorsement is presumed to have acquired the cheque through the blank endorsement Article 19 para. 1 sent. 3 of Law 5960/1933. The lawful holder who bases his right on an uninterrupted series of endorsements with the last endorsement in blank is not obliged to return the cheque to a previous beneficiary who was deprived of the cheque for any reason (including theft, robbery, piracy and destruction of the cheque Article 68 of Law 5960/1933) unless he acquired the cheque in bad faith or by committing gross fault Article 21 of Law 5960/1933. The lawful holder of a bearer cheque Article 69 of Law 5960/1933 or of an endorsable cheque who bases his right on an uninterrupted series of endorsements with the last endorsement in blank, and to whom the cheque came after its dispossession from its lawful holder for any reason (including theft, robbery, piracy and destruction of the cheque Article 68 of Law 5960/1933), if he did not acquire the cheque in bad faith, or did not commit gross fault upon acquisition, if the cheque is annulled for any reason, has against the annuller an action of unjust enrichment Article 67 para. 1 of Law 5960/1933 with five-year limitation from the issuance of the cheque Article 67 para. 2 of Law 5960/1933. The lawful holder of a bearer cheque Article 69 of Law 5960/1933 who bases his right on an uninterrupted series of endorsements with the last endorsement in blank, and to whom the cheque came after its dispossession from its lawful holder, if he did not acquire the cheque in bad faith, or did not commit gross fault upon acquisition, if the cheque is annulled for any reason, has against the annuller an action of unjust enrichment Article 67 para. 1 of Law 5960/1933 with five-year limitation from the issuance of the cheque Article 67 para. 2 of Law 5960/1933.

Rights of the person who paid the cheque by recourse

The endorser Article 44 para. 3 of Law 5960/1933 or the guarantor Article 27 para. 3 of Law 5960/1933Article 44 para. 3 of Law 5960/1933 who paid the cheque is entitled to sue his preceding endorsers Article 17 para. 1 of Law 5960/1933, guarantors Article 27 para. 1 of Law 5960/1933 and the drawer Article 12 para. 1 of Law 5960/1933. The obligor who paid the cheque is entitled to demand:

• the amount he paid, and
• interest on the amount from the day on which he paid the amount, and
• the costs he paid.

Cheques drawn and payable in Greece bear interest at the general default rate, every other cheque at 6%. The obligor who paid the cheque by recourse may demand its delivery together with the bank’s certification of non-payment (or the certification of the clearing house or the protest)Article 47 para. 1 of Law 5960/1933. The endorser who paid the cheque is entitled to delete his endorsement and those of the subsequent endorsers Article 47 para. 2 of Law 5960/1933

Persons not liable towards any holder

Towards the holder of the cheque, the following are not liable:

• the endorser who lawfully inserted a clause concerning his non-liability Article 18 para. 1 of Law 5960/1933, or
• the endorser who prohibited by clause further endorsements towards subsequent endorsers and guarantors Article 18 para. 2 of Law 5960/1933

Payment order on the basis of a timely presented cheque

In the relevant payment order it suffices to state the lawful and timely presentation of the cheque and the certification of non-payment by one of the means provided in Article 40 of Law 5960/1933. It is not required to state:

• the account number of the drawer, or
• the time of presentation of the cheque, or
• the place of presentation of the cheque 31012/1995 Thessaloniki Single-Member Court of First Instance, or
• the branch where the drawer’s account is held 5441/2008 Athens Court of Appeals, or
• the branch of payment of the cheque 5441/2008 Athens Court of Appeals.

The opposition against a payment order issued on the basis of a timely presented cheque is heard under the procedure for negotiable instruments 7196/1998 Thessaloniki Single-Member Court of First Instance. According to one view, the opposition against a payment order issued on the basis of an invalid cheque that was converted into a debt instrument is heard under the ordinary procedure. This is by analogy to the provisions applicable to a converted invalid bill of exchange 369/2004 Rhodes Magistrate’s Court. Territorial jurisdiction for the issuance of a payment order is judged according to the general provisions, since there is no special provision. Therefore, if there are multiple jurisdictions, the creditor may choose the court he wishes (general or special jurisdiction of any obligor, court of the place of issuance, payment, acceptance or collection of the negotiable instrument, jurisdiction by agreed prorogation) Article 321 of the Civil Code (AK)Article 1 of Law 5960/1933Article 2 of Law 5960/1933Article 8 of Law 5960/1933. That court also becomes exclusively territorially competent for the opposition under Article 632 KPolD or Article 633 KPolD, according to the prevailing view.

Defences raised against the holder

The obligation arising from the signature on the cheque is autonomous for each signatory. The discharge of one debtor from his liability by raising a defence does not abolish the liability of the other obligors under the title. Signatures that for any reason cannot create obligations for the signatories or their principals (including incapacity to assume obligations from a cheque, forgery, non-existence of the person) do not affect the validity of the obligations of the other signatories Article 10 of Law 5960/1933.

Defence of lack of underlying cause

The defendant may submit that when he signed the cheque he signed it for a specific cause, however that cause is non-existent. If the court accepts the plea, the defendant is released from his debt under the provisions on unjust enrichment AP 692/2008.

In the order cheque

Defence of lack of standing of the holder

The debtor argues that:

• the holder of the cheque fraudulently took the cheque from the previous holder, or
• the holder of the cheque acquired the cheque knowing that his predecessor held it after fraudulent removal.

For the establishment of bad faith of the third party, no collusion between transferor and acquirer is required. It is sufficient that the third party knows that the transferor is not the owner of the title and that the transfer will result in damage to the true owner. The same defence exists also when it is alleged that the holder, upon acquisition of the title, was in gross negligence (e.g. did not notice obvious signs of forgery of the last name, or excessive similarity of at least some signatures). In case of success of the defence, the payment order or the lawsuit is judged inadmissible.

Defence of forgery of the debtor’s signature

The debtor argues that his signature was forged, therefore he himself did not declare a will. According to one view, the defence of forgery is inadmissible if the documents proving the forgery are not produced, if the witnesses and other means of evidence are not named. According to another view, the defence is not inadmissible on that ground. For the admissible raising of the defence of forgery, the lawyer of the objecting party must appear together with the objecting party at the hearing or have a special power of attorney concerning the challenge of the document as forged Article 98 element b KPolD, or a criminal complaint for forgery must have been filed. The countersigning of the briefs by the objecting litigant is not sufficient if he himself did not appear at the hearing. The contestation of the genuineness of the signature constitutes a defence, and not a denial, therefore the burden of proof lies with the party raising the defence of forgery, by way of derogation from Article 457 KPolD, and he may use any means of evidence, even witnesses. If criminal prosecution is pending for the resolution of the dispute, the court may, of its own motion or upon request of the litigant, order the postponement of the hearing until the irrevocable conclusion of the criminal proceedings Article 250 KPolD. Even if there is no pending criminal prosecution, if serious suspicions arise in court against a particular person for forgery, the court may postpone the trial until the end of the criminal trial Article 461 KPolDArticle 462 KPolD. Forgery is not committed if the cheque bears the signature of the drawer AP 923/2002, if the drawer and the payee had agreed that some element be filled in later, and the payee-holder fills in the element contrary to the agreement AP 923/2002, even if that element is the amount AP 923/2002. Forgery is committed if the cheque bears the signature of the drawer, if the drawer and the payee had not agreed that some element be filled in later, and the payee-holder fills in the element AP 839/1994.

Defence of alteration of the content of the title

The debtor argues that, after the placing of his signature on the cheque, changes were made to its text. The changes may consist of additions, deletions, erasures or alterations of elements of the text (e.g. the amount, the date of expiry, clauses), and may have been caused intentionally or accidentally (e.g. forgery by a third party, accidental covering of elements with ink stains). The liability of the signatories depends on the content of the cheque at the time they sign. If the text is altered, the signatories who signed before the alteration are liable on the basis of the original text they signed, while subsequent signatories are liable on the basis of the altered text Article 51 of Law 5960/1933. It is argued that if the debtor signed before the alteration but consented to or approved of it, he is liable under the terms of the altered text. The objecting party bears the burden of proving the alteration and that his signature preceded the alteration. To this end, he may use any means of evidence. If the debtor negligently completed the cheque (e.g. wrote the amount only in figures), liability may be created against him because by his conduct he facilitated the falsification of the text of the title Article 281 of the Civil Code (AK)Article 300 of the Civil Code (AK). In case of alteration of the amount of the cheque, the debtor who fully discharges the obligation he had undertaken, which is less than the amount finally stated, should not request the delivery of the cheque but only a discharge receipt. Otherwise, without the title, the holder will not be able to proceed against the debtors who undertook the altered obligation and demand the additional amount to which he is entitled.

Defence of lack or excess of representative authority of the signatory

If a person places his signature on the cheque on behalf of another, without being his agent or in excess of his authority as agent, the obligation from the cheque burdens him Article 11 para. 1 sent. 2 of Law 5960/1933Article 11 para. 2 of Law 5960/1933. If he paid, he has the rights that the alleged represented party would have Article 11 para. 1 sent. 2 of Law 5960/1933Article 11 para. 2 of Law 5960/1933. The represented party may raise the relevant defence even against a good-faith holder AP 574/2001. Such excess of representative authority also exists when the manager of a company signs, without express authorisation, a cheque issued by the company with himself as the beneficiary AP 574/2001. A person who, for any reason, was deprived of possession of the cheque cannot claim the cheque from the holder who bases his right on an uninterrupted series of endorsements unless that holder acquired the cheque in bad faith or by committing gross negligence Article 21 of Law 5960/1933Article 19 of Law 5960/1933.

Defence of contractually inconsistent completion of the blank cheque

If the completion of the blank cheque is made contrary to the agreement, the relevant defence may be raised against the holder only if he acquired the cheque in bad faith or by committing gross fault Article 13 of Law 5960/1933.

Defence of lack of cause for issuance of the cheque

The cheque is indeed a non-causal legal transaction (i.e. the cause of issuance is not required to be stated on it), but an obligation cannot be created without cause Article 1 of Law 5960/1933Article 21 of Law 5960/1933Article 22 of Law 5960/1933Article 28 of Law 5960/19331682/1991 Thessaloniki Court of Appeals. (E.g., debt from gambling or betting 1682/1991 Thessaloniki Court of Appeals2130/1987 Athens Court of Appeals) The persons sued under the cheque may raise against the holder defences from their personal relations with the drawer or the previous holders, only if the holder, upon acquisition of the cheque, acted knowingly to the detriment of the debtor Article 22 of Law 5960/1933. The obligation arising from the signature on the cheque is autonomous for each signatory. Signatures that for any reason cannot create obligations for the signatories or their principals (including incapacity to assume obligations from a cheque, forgery, non-existence of the person) do not affect the validity of the obligations of the other signatories Article 10 of Law 5960/1933. The death of the drawer or his incapacity after the issuance of the cheque does not affect its effects Article 33 of Law 5960/1933. The party invoking against the holder the non-observance of the time-limit for presentation bears the burden of proving it Article 43 of Law 5960/1933.

In the anonymous / bearer cheque

In the nominative cheque

Against the holder – assignee, the debtor may raise all defences he had against the assignor Article 463 of the Civil Code (AK). The defences must exist before the notification Article 463 of the Civil Code (AK). According to case-law, it suffices that at the time of notification the legal ground or the basis of the defence exists, even if the factual circumstances on which it is founded arose after the notification (e.g. fulfilment of resolutive condition, occurrence of limitation after notification).

Non-presentation / Late presentation – Action based on causal relationship or unjust enrichment

A cheque that was not presented in time and therefore was not stamped remains valid and as such cannot be converted into another legal transaction and operate as an abstract promise / acknowledgement of debt or debt instrument for the provision of money 3066/2003 Thessaloniki Court of Appeals616/2002 Larissa Court of Appeals1121/2000 Thessaloniki Court of Appeals162/2000 Larissa Multi-Member Court of First InstanceAP 1459/19992079/1991 Athens Single-Member Court of First Instance53/1987 Agrinion Single-Member Court of First Instance. In this case, the holder must bring an action on the basis of the underlying relationship, or, if this cannot be pursued, bring the action of unjust enrichment afforded Article 60 of Law 5960/19333066/2003 Thessaloniki Court of Appeals. The relevant action of unjust enrichment has a five-year limitation from the date of issuance of the cheque Article 60 para. 2 of Law 5960/1933.

Invalid cheque

Invalidity for formal reasons

The drawer and the first holder of the invalid cheque are presumed to have wanted its conversion into another legal transaction (no reference to the conditions of Article 182 of the Civil Code (AK) is required) AP 392/2001. Between the endorser and the lawful holder no such presumption exists 861/2000 Thessaloniki Court of Appeals. The debtor who proceeds against them must prove himself that they did not have such intention 7643/1995 Athens Court of Appeals. Conversion may be made into:

• a debt instrument for the provision of money Article 76 sent. b of Legislative Decree of 17-07/13-08-1923 (if the drawer is a merchant) 1601/2003 Athens Court of Appeals369/2004 Rhodes Magistrate’s Court576/2002 Thessaloniki Magistrate’s Court, or
• an abstract promise of debt Article 873 of the Civil Code (AK)1601/2003 Athens Court of Appeals, or
• a delegation, or
• a commercial order to pay (if drawer and payee are merchants) 861/2000 Thessaloniki Court of Appeals.

The lack of date of assumption of the obligation from an abstract promise of debt does not affect its validity 9175/1986 Athens Court of Appeals. The endorsement placed on an invalid cheque is converted into another legal act depending on the legal transaction into which the cheque is converted. The endorsement of an invalid cheque that is converted into a debt instrument is valid as endorsement by analogous application of the provisions on endorsement of bills of exchange / promissory notes to order Law 5325/19326741/2007 Athens Court of Appeals5533/2004 Athens Court of Appeals. The lawful holder, after endorsement, who converts the invalid cheque into a debt instrument must prove the assignment of the claim (either by stating it in the document of the debt instrument, or in the application for issuance of a payment order) in order to proceed against the drawer 861/2000 Thessaloniki Court of Appeals. The invalid cheque that is converted into an abstract promise of debt is transferred by assignment of the claim that the endorser has against its drawer 6741/2007 Athens Court of Appeals576/2002 Thessaloniki Magistrate’s Court11036/1990 Athens Court of Appeals. For the assignment to give rise to rights for the assignee, the relevant notification must be made to the drawer 20/1996 Arta Single-Member Court of First Instance. The service of the resulting payment order also constitutes such notification 20/1996 Arta Single-Member Court of First Instance. According to one view, the procedurally inactive crossed cheque, for the holder by endorsement, is also assimilated to the formally invalid cheque 8413/2003 Athens Court of Appeals. In case of invalidity for formal reasons, the guarantee also becomes invalid, which may be valid by conversion into a guarantee under the Civil Code (AK) 8413/2003 Athens Court of Appeals1601/2003 Athens Court of Appeals.

Conversion into another legal transaction and transfer

By the conversion of the cheque into another contract, a new claim is created, separate from the cheque, between the drawer and the payee. The endorsements are judged anew as to whether they constitute valid endorsement of a debt instrument. The endorsement placed before the conversion of the cheque may, on its own, after the conversion into a debt instrument, only constitute an informal assignment between the endorser and the holder (assignor – assignee), since acceptance of the assignment by the assignee does not appear from the document. From such an informal assignment no payment order may be issued, because the obligation of payment by the assignor does not arise directly from the title 861/2000 Thessaloniki Court of Appeals. With the limitation of the cheque, the rights arising from it are weakened. Therefore, the rights of the lawful holder, after endorsement, of the cheque are also weakened.

Limitation of the claim from an invalid cheque converted into another legal transaction

The claim from an invalid cheque converted into another legal transaction has a twenty-year limitation Article 249 of the Civil Code (AK)1623/1998 Athens Court of Appeals.

Payment order on the basis of an invalid cheque converted into another legal transaction

The application for the payment order must state that the cheque is valid by conversion as a debt instrument or abstract promise of debt, and that it bears all the elements thereof required by law AP 392/2001. The debt instrument or abstract promise of debt must be stamped by the competent tax office (DOY) before the issuance of the payment order (2% or 3% on capital and interest, plus 20% surcharge in favour of OGA) Article 14 of Presidential Decree of 28-07-1931 (Government Gazette A 239/28-07-1931)Article 15 of Presidential Decree of 28-07-1931Article 12 of Presidential Decree of 28-07-1931Article 13 of Presidential Decree of 28-07-193112607/2005 Thessaloniki Single-Member Court of First Instance. The application and the decision of the payment order on the basis of a debt instrument or abstract promise of debt are not required to state the number of the duplicate stamping receipt of the tax office (DOY) 369/2004 Rhodes Magistrate’s Court.

Invalidity due to late presentation

Conversion Article 182 of the Civil Code (AK) may be made into:

• a debt instrument for the provision of money Article 76 sent. b of Legislative Decree of 17-07/13-08-1923 (if the drawer is a merchant) 5533/2004 Athens Court of Appeals2162/1999 Thessaloniki Court of Appeals187/1993 Thessaloniki Court of Appeals341/1983 Edessa Single-Member Court of First Instance, or
• an abstract promise of debt 2162/1999 Thessaloniki Court of Appeals5467/1990 Athens Single-Member Court of First Instance (payment order)341/1983 Edessa Single-Member Court of First Instance.

The interest in the payment order on the basis of an invalid, due to non-timely presentation, cheque that has been converted is owed from the date of presentation of the invalid and converted cheque 5533/2004 Athens Court of Appeals.

Time-barred cheque

A cheque that has become time-barred due to the lapse of six months from its presentation cannot be converted into another legal transaction 83/2007 Nafplion Magistrate’s Court43/2005 Ioannina Court of Appeals616/2002 Larissa Court of Appeals6/2002 Rhodes Single-Member Court of First Instance. The transfer of the claim from a debt instrument is made by endorsement or by assignment.

Aval (third-party guarantee)

By the aval, the avalist guarantees in favour of the drawer or endorser the payment of all or part of the amount of the cheque Article 25 para. 1 of Law 5960/1933. The guarantee is given to a signatory of the cheque or to a third party, except the drawee Article 25 para. 2 of Law 5960/1933. The avalist is jointly and severally liable with the person in favour of whom he guarantees Article 27 para. 1 of Law 5960/1933, and his liability is independent of the validity of the obligation of the person in favour of whom he guarantees, unless that obligation is invalid due to formal defect Article 27 para. 2 of Law 5960/1933. For the aval to be valid, the avalist must have capacity for legal transactions Article 58 of Law 5960/1933. For the aval to be valid, the avalist’s signature must be placed Article 26 para. 2 of Law 5960/1933 on the cheque or on the allonge Article 26 para. 1 of Law 5960/1933 with the words per aval Article 26 para. 2 of Law 5960/1933. However, the mere signature of a third party on the front part of the cheque is also valid as aval Article 26 para. 3 of Law 5960/1933. If the person in favour of whom the aval is given is not named, the aval is deemed to be given in favour of the drawer Article 26 para. 4 sent. 2 of Law 5960/1933. The drawee cannot be an avalist Article 25 para. 2 of Law 5960/1933.

Payment by the bank

The cheque (even postdated) is payable on sight Article 28 para. 1 of Law 5960/1933Article 28 para. 2 of Law 5960/1933. The bank has instructions from the drawer of the cheque to pay. If the bank breaches the relationship of mandate, it is liable towards the drawer, never towards the holder. Indicatively, breach of the mandate constitutes refusal of payment of a timely presented and valid cheque, payment of an invalid cheque, payment of the cheque despite the drawer’s revocation. The drawee, after paying the cheque, is entitled to demand that the discharged cheque be returned to it Article 34 para. 1 of Law 5960/1933. The holder cannot refuse partial payment Article 34 para. 2 of Law 5960/1933. The drawee may demand that mention be made of the partial payment on the cheque and that a certificate of partial discharge be given Article 34 para. 3 of Law 5960/1933. If the cheque is partially paid due to lack of available funds, the bank must note on the cheque the partial discharge and the lack of remaining available funds. The drawee, when about to pay an order cheque, is obliged to verify the regularity of the continuity of the endorsements, but not the signatures of the endorsers Article 35 of Law 5960/1933. The bank may pay the cheque even after the time-limit for presentation, if it has not been revoked Article 32 para. 2 of Law 5960/1933. In practice, banks come to an arrangement with their client as to whether or not they will pay overdue cheques. The revocation of the cheque is, by law, valid only after the time-limit for presentation Article 32 para. 1 of Law 5960/1933. In practice, banks accept untimely revocation

• after consultation with their client (this constitutes issuance of a bounced cheque), or
• due to some substantive or formal defect, loss of chequebook, etc. The bank usually requests for the above a sworn declaration of revocation of the cheque stating the reason for revocation, with a clause by which the client undertakes to pay it any expense related to the cheque that the bank had to incur (interest, court costs or other costs, etc).

Clauses on the cheque

Payable to account, Value for credit to account

The relevant clause or an equivalent may be inserted by the drawer or the holder Article 39 para. 1 of Law 5960/1933. With this clause, the cheque cannot be paid in cash, but only credited to a bank account of the holder Article 39 para. 1 of Law 5960/1933Article 39 para. 2 of Law 5960/1933AP 172/2009. The accounting settlement may be made by credit to an account, giro or set-off Article 39 para. 2 of Law 5960/1933. The deletion of the relevant clause is deemed not to have been made Article 39 para. 3 of Law 5960/1933. If the drawee disregards the provisions on the clause, it is liable for the damage caused up to the amount of the cheque Article 39 para. 4 of Law 5960/1933.

Return without expenses, Without protest

The relevant clause or an equivalent may be inserted by the drawer Article 43 para. 1 of Law 5960/1933, the endorser Article 43 para. 1 of Law 5960/1933 or the avalist Article 43 para. 1 of Law 5960/1933, on the title Article 43 para. 1 of Law 5960/1933, and they must sign it Article 43 para. 1 of Law 5960/1933. With this clause, the holder does not need certification from the bank, or from the clearing house or a protest, before exercising recourse Article 43 para. 1 of Law 5960/1933. If the clause was signed by the drawer:

• its effect applies to all signatories Article 43 para. 3 of Law 5960/1933, and
• the costs of drawing up a protest or certification drawn up by the holder, despite the relevant clause, burden the holder Article 43 para. 4 of Law 5960/1933

If the clause was signed by the endorser or the avalist:

• its effect applies only to themselves Article 43 para. 3 of Law 5960/1933, and
• the costs of drawing up a protest or certification drawn up by the holder, despite the relevant clause, may be claimed from each signatory Article 43 para. 4 of Law 5960/1933

The holder of an unpaid cheque bearing the term “return without expenses” notifies his endorser and the drawer within four days from the day of presentation of the cheque Article 42 para. 1 of Law 5960/1933.

Crossed cheque

The drawer or the holder of the cheque Article 37 para. 1 of Law 5960/1933 may render it crossed by placing two parallel lines on the front part of it Article 37 para. 2 of Law 5960/1933. The crossing is general when nothing is stated between the lines or only the term “banker” or an equivalent is written Article 37 para. 3 of Law 5960/1933. The crossing is special when the name of a specific bank or its branch is written between the lines Article 37 para. 3 of Law 5960/1933. By general crossing, the cheque may be paid by the bank stated on the cheque as drawee, but only to a person who is its client or to another bank Article 38 para. 1 of Law 5960/19338567/2006 Athens Court of Appeals. By special crossing, if the bank stated as drawee is the same as the bank stated between the crossing, the cheque may be paid only to a client of the bank. If the bank stated as drawee is different from the bank between the crossing, the cheque may be paid only to the bank stated between the crossing Article 38 para. 2 of Law 5960/1933AP 2059/2007. General crossing may be converted into special, but not vice versa Article 37 para. 4 of Law 5960/1933. The deletion of the crossing or of the bank’s name is deemed not to have been made Article 37 para. 5 of Law 5960/1933. If the bank does not observe the provisions on crossing, it is liable for the relevant damage up to the amount of the cheque Article 38 para. 4 of Law 5960/1933. If the bank pays the cheque to a person who is not its client or to another bank, no invalidity of the stamping of the cheque or of the cheque itself ensues AP Crim. 393/2015, but only the bank has an obligation to compensate, if damage was caused by such breach AP Crim. 393/2015.

Clauses deemed not to have been written

Clauses on the cheque concerning interest are deemed not to have been written. Clauses on the cheque concerning the non-liability of the drawer are deemed not to have been written Article 12 para. 2 of Law 5960/1933. Clauses on the cheque to the effect that it is not payable on sight Article 28 para. 1 sent. 2 of Law 5960/1933. Cheques in multiple copies under Article 49 of Law 5960/1933. Cheques in foreign currency under Article 36 of Law 5960/1933.

Cheque payable in a foreign country

The law of the country in which the cheque is payable determines:

• whether the cheque is always payable on sight or whether it is permitted to be payable on a term from sight, as well as the effects of postdating Article 75 item 1 of Law 5960/1933, and
• the time-limit for presentation Article 75 item 2 of Law 5960/1933, and
• whether the cheque can be accepted, certified, confirmed or visa-ed and what are the effects of those references Article 75 item 3 of Law 5960/1933, and
• whether the holder may demand or is obliged to accept partial payment Article 75 item 4 of Law 5960/1933, and
• whether the cheque may be crossed or contain the clause account only or an equivalent expression and what are the effects of such clause or equivalent Article 75 item 5 of Law 5960/1933, and
• whether the holder has special rights upon the cover and what is their nature Article 75 item 6 of Law 5960/1933, and
• whether the drawer may revoke the cheque or oppose its payment Article 75 item 7 of Law 5960/1933, and
• the measures to be taken in case of loss or theft of the cheque Article 75 item 8 of Law 5960/1933, and
• whether the protest or equivalent certification is necessary for the preservation of the right of recourse against the endorsers, the drawer and the other obligors Article 75 item 9 of Law 5960/1933.

Criminal liability

Bounced cheque

The issuance of a bounced cheque is objectively established if:

• a valid cheque is issued AP Crim. 393/2015, and
• the drawer signs on the cheque at the place of the drawer’s signature AP Crim. 393/2015, and
• the cheque is presented in time for payment AP Crim. 393/2015, and
  • the drawer of the cheque does not have, in the bank account he holds with the drawee, available funds Article 79 para. 1 of Law 5960/1933, both at the time of issuance and at the time of presentation for payment of the cheque AP Crim. 393/2015, or
  • the drawer untimely (before the end of the time-limit for presentation) revokes the cheque, and the bank does not pay the cheque AP 1847/19875501/1989 Athens Single-Member Court of First Instance.

The issuance of a bounced cheque is subjectively established by intent AP Crim. 393/2015. The issuance of a bounced cheque constitutes a misdemeanor Article 79 para. 1 of Law 5960/1933Article 53 of the Penal Code (PK). The penalty threatened for the issuance of a bounced cheque is:

• imprisonment from 3 months to 5 years Article 79 para. 1 of Law 5960/1933Article 53 of the Penal Code (PK), and
• a monetary penalty of at least ten thousand drachmas Article 79 para. 1 of Law 5960/1933.

Will you consult the PK? The issuance of a bounced cheque is prosecuted only upon criminal complaint Article 79 para. 5 of Law 5960/1933. The criminal complaint may be filed by:

• the holder of the cheque that was not paid Article 79 para. 5 of Law 5960/1933, and
• the obligor by recourse who paid the cheque and became its holder Article 79 para. 5 of Law 5960/1933AP 23/2007.

The postdating of the cheque is irrelevant as regards the time at which the drawer must have available funds Article 79 para. 1 of Law 5960/1933. If the drawer untimely revokes the cheque, and the bank does not pay the cheque, the available capital is essentially converted into unavailable AP 1847/19875501/1989 Athens Single-Member Court of First Instance. Criminal liability is not covered by the revocation of the cheque, even if there are available funds in the drawer’s account. The punishability is extinguished if the perpetrator fully compensates the holder after the lawful presentation and non-payment of the cheque Article 79 para. 3 of Law 5960/1933Article 4 para. 1 sent. b of Law 2408/1996. This compensation does not consist only of the discharge of the cheque, but also includes any other damage to which the creditor was subjected by the delayed discharge of the cheque AP 1096/2002AP 1616/2006.

• If the perpetrator issues bounced cheques by profession or by habit Article 79 para. 2 sent. a of Law 5960/1933, or
• if the perpetrator is particularly dangerous, according to the testimony of the circumstances under which the offense was committed Article 79 para. 2 sent. b of Law 5960/1933,

imprisonment of at least one year and up to five years is imposed Article 79 para. 2 of Law 5960/1933Article 53 of the Penal Code (PK). In these cases, no extinguishment of punishability through the full compensation of the holder occurs Article 79 para. 3 of Law 5960/1933Article 4 para. 1 sent. b of Law 2408/1996. The court orders the publication in the press, under the supervision of the prosecutor, of a summary of the convicting judgment. The relevant cost is included in the costs of Article 581 of the Code of Criminal Procedure (KPoinD) Article 79 para. 2 sent. b of Law 5960/1933. The drawer of the bounced cheque is also considered the person who signs the cheque placing the name and signature of another, when the relationship of representation and the mandate of the other do not appear from the body of the cheque 68/2000 Nafplion Court of Appeals. In cases of bounced cheques, no preliminary investigation is ordered Article 79 para. 4 sent. b of Law 5960/1933. The criminal prosecution is brought by direct summons to the courtroom Article 79 para. 4 sent. a of Law 5960/1933. The limitation of the claim arising from the cheque is different from the criminal limitation of the offense of issuing a bounced cheque, which for the issuance of a bounced cheque as a misdemeanor is five years AP Crim. 1358/2006. For the issuance of a bounced cheque in the amount of EUR 8,076,000, the perpetrator was convicted, with recognition of a mitigating circumstance Article 84 para. 2 element b of the Penal Code (PK), to imprisonment of 3 years, which was converted at EUR 5 per day, and to a monetary penalty of EUR 12,000 AP Crim. 393/2015.

Perjury concerning dispossession of a cheque

A person who certifies under oath before the president of the court that he was deprived of the cheque due to loss, embezzlement, theft, robbery, piracy or destruction thereof is punished under the provisions on perjury Article 80 of Law 5960/1933.

Action for damages on the basis of a bounced cheque

For the relevant action of damages due to tort, interest starts running from the first relevant demand by the plaintiff (therefore if no earlier demand is proved, from the service of the lawsuit), and not from the day after the presentation of the cheque for payment 7643/1998 Thessaloniki Single-Member Court of First Instance. The tort action is also available to the obligor by recourse who paid the bounced cheque and became its holder Article 79 para. 5 sent. b of Law 5960/1933.

Bill of Exchange

In a bill of exchange, the drawee is the debtor of the claim from the bill of exchange, and the drawer is the creditor of the claim. The drawee acknowledges his debt to the drawer. The drawer may direct that the money be received by a third person, the payee. The drawer (or the payee) is the initial holder of the bill of exchange, and may transfer his claim by endorsement to a third party. The endorsee becomes the new holder of the bill of exchange. If the holder is not paid, he may proceed against the drawee, the endorsers and the avalists. In turn, each endorser and avalist who paid the bill of exchange may proceed against his preceding endorsers or avalists, and against the drawee. The drawee and the endorsers are called payors.

Elements of validity

For a bill of exchange to be valid, the following elements must be included in it:

• 1. The word “Bill of Exchange” in the text of the title Article 1 item 1 of Law 5325/1932. If the bill of exchange is issued in a foreign language, the corresponding foreign word may be stated instead of the Greek Article 1 item 1 of Law 5325/1932.
• 2. The time of maturity Article 1 item 4 of Law 5325/1932. If the time of maturity is not noted, the bill of exchange is deemed payable on sight Article 2 sent. 2 of Law 5325/1932. If a time of maturity is noted, but it is not on sight, on a term from sight, on a fixed day or on a term from a fixed day, the bill of exchange is invalid Article 33 sent. 1 of Law 5325/1932. The bill of exchange is also invalid if successive times of maturity are stated Article 33 sent. 2 of Law 5325/1932.
• 3. The order to pay a specified amount Article 1 item 2 of Law 5325/1932. The order must be simple and unconditional Article 1 item 2 of Law 5325/1932.
• 4. The name of the payor, that is, the person undertaking to pay Article 1 item 3 of Law 5325/1932. Often, the payor also becomes drawee of the bill of exchange, for which it suffices to place his signature on the front part of the bill of exchange Article 25 para. 1 sent. 3 of Law 5325/1932. * The drawee’s signature is not required for the validity of the bill of exchange, however it constitutes evidence in favour of the drawer regarding the conclusion of an agreement for the acceptance of the bill of exchange.
• 5. The place of payment Article 1 item 5 of Law 5325/1932. If the place where payment will be made is not stated, it is supplied by the place of the payor Article 2 sent. 3 of Law 5325/1932 which is also deemed the place of residence of the payor Article 2 sent. 3 of Law 5325/1932.
• 6. The name of the person to whom the payment will be made or in favour of whom the payment will be made Article 1 item 6 of Law 5325/1932.
• 7. The place of issuance and the time of issuance of the bill of exchange Article 1 item 7 of Law 5325/1932. If the place of issuance is not stated, it is supplied by the stated place of the drawer Article 2 sent. 4 of Law 5325/1932.
• 8. The signature of the drawer of the bill of exchange Article 1 item 8 of Law 5325/1932.

For the validity of the bill of exchange, no specific formatting of the document is required, although for the convenience of the contracting parties a standardised document is often used.

Limitation of the claim from a bill of exchange

The claim against the drawee of the bill of exchange and his avalist is barred by limitation three years after the maturity of the bill of exchange Article 70 sent. 1 of Law 5325/1932. If a payment order is issued on the basis of the bill of exchange, and the three-year limitation has not been completed, and the payment order becomes final, the limitation becomes twenty years, starting from the finality of the payment order AP 1538/2007Article 268 sent. 1 of the Civil Code (AK). If the payment order is served on the debtor a second time under Article 633 para. 2 KPolD, and the debtor does not file an opposition against it in time AP 1538/2007Article 633 para. 2 KPolD, or if the opposition against the payment order is finally rejected, the payment order becomes final. Will you consult the AK? If there is a clause “return without expenses”, the holder’s claim by recourse (i.e. against the drawee, the endorsers and the avalists) is barred by limitation one year after maturity Article 70 sent. 2 of Law 5325/1932. The same limitation applies in case of timely drawing up of a protest, starting from the drawing up thereof Article 70 sent. 2 of Law 5325/1932. The claims by recourse for reimbursement (i.e. the claims of an endorser against the drawee, other endorsers and the avalists) are barred by limitation in six months from the day on which the endorser paid the bill of exchange or the day on which an action was brought against him Article 70 sent. 3 of Law 5325/1932.

Invalid bill of exchange

The invalid bill of exchange is valid by conversion as an abstract promise or acknowledgement of debt, debt instrument for the provision of money by a merchant or order to pay from a merchant to a merchant, without it being necessary to invoke the existence of the formalities of Article 182 of the Civil Code (AK), since the will of the parties for conversion is directly derived from the document AP 2088/1986499/2002 Larissa Court of Appeals576/2002 Thessaloniki Magistrate’s Court. If the drawer and the payee are the same person, and the drawee of the invalid bill of exchange is a merchant 4722/1986 Athens Court of Appeals, and the invalid bill of exchange bears a clause to order, the invalid bill of exchange may be valid as a debt instrument for the provision of money by a merchant Article 76 para. a of Legislative Decree of 17.7/13.8.1923Article 76 para. b of Legislative Decree of 17.7/13.8.1923576/2002 Thessaloniki Magistrate’s Court. If the drawer and the payee are the same person, and the conditions for conversion into a debt instrument for the provision of money do not apply, the invalid bill of exchange may be valid as an abstract promise or acknowledgement of debt 576/2002 Thessaloniki Magistrate’s Court. If the drawer and the payee are different persons, and both are merchants, the invalid bill of exchange may be valid as an order to pay from a merchant to a merchant 576/2002 Thessaloniki Magistrate’s Court.

Endorsement of an invalid bill of exchange

The endorsement of a bill of exchange does not constitute a declaration of acknowledgement of debt (contrary to the acceptance of a bill of exchange), but a declaration of transfer of rights 7180/1993 Thessaloniki Single-Member Court of First Instance. Therefore, the endorsement cannot be valid by conversion as a debt instrument but only as an assignment 7180/1993 Thessaloniki Single-Member Court of First Instance.

Endorsement before the maturity of the invalid bill of exchange

If the invalid bill of exchange is endorsed before its maturity, the endorsement is valid and entails the effects of a simple endorsement AP 582/1977499/2002 Larissa Court of Appeals. In this case, the debtor may raise:

• • the objections concerning the validity of his own declaration in the title, and
  • the objections deriving from the content of the document, and
  • the objections that belong to him directly against the holder

Article 78 para. 2 of Legislative Decree of 17.7/13.8.1923499/2002 Larissa Court of Appeals

Endorsement after the maturity of the invalid bill of exchange

If the invalid bill of exchange that is valid as a debt instrument is endorsed after its maturity, the endorsement is valid by conversion as an assignment of the claim arising from the debt instrument 499/2002 Larissa Court of Appeals. In this case, in order for rights to arise for the assignee of the claim, he or the endorser must notify the assignment to the debtor, even informally 4789/1990 Athens Court of Appeals499/2002 Larissa Court of Appeals. At the same time, the debtor may unrestrictedly raise against the holder of the invalid bill of exchange also defences from the basic causal relationship that he had against the assignor endorser before the notification 499/2002 Larissa Court of AppealsAP 335/1999.

Payment order from an informal assignment

According to one view, no payment order may be issued from an informal assignment, because the completion of the assignment does not appear from the document. According to another view, the service of the resulting payment order also constitutes such notification 20/1996 Arta Single-Member Court of First Instance.

Defences against the bill of exchange

Defence of non-existence of the underlying cause

The defendant may raise a defence that there is no cause for the issuance or endorsement of the bill of exchange, either because it was from the outset non-existent, illegal, immoral or defective (e.g. fictitious), or because it expired or did not follow AP 1266/2011AP 903/2006. If the defence is accepted, the claim from the bill of exchange becomes inactive and the debtor is released AP 1266/2011. If the defendant were not released by acceptance of the relevant defence, the payment of the bill of exchange would lead to unjust enrichment of the holder of the bill of exchange at the expense of the defendant AP 1266/2011. The defendant need only refer to the elements that render his obligation without legal cause and consequently the payment of the bill of exchange undue AP 1266/2011. The defendant is not required to expressly invoke the unjust enrichment of the holder of the cheque caused at his expense by the payment of the bill of exchange AP 1266/2011. The relevant plea may also be raised against a third-party holder, but it must be proved that he knew of the plea and acted to the detriment of the debtor of the bill of exchange AP 903/2006Article 17 of Law 5325/1932. The holder acts to the detriment of the debtor when, at the time of acquisition of the bill of exchange, he knew of the non-existence or defectiveness of the cause of issuance or endorsement and acquired it in order to prevent him from raising material defences from his personal relations with the drawer or the previous holder of the bill of exchange and thus achieve its payment, which without its transfer would not have been achieved AP 1266/2011. By detriment is meant the loss of a defence of the debtor that would be based on the subjective relations of debtor and transferor of the bill of exchange AP 903/2006. The debtor bears the burden of proving the non-existence (in the broad sense, i.e. due to expiration, non-following or non-existence – undue) or the unlawfulness (illegality or immorality) of the cause at the time of issuance of the bill of exchange. This may be done by way of defence, or by action for return of what was paid, or by opposition under the provisions on unjust enrichment 3765/2000 Athens Multi-Member Court of First Instance9415/1999 Thessaloniki Single-Member Court of First Instance. The debtor and endorser who is sued by the lawful holder cannot raise the above defences, except if:

• the holder knew, upon acquisition of the title, of the existence of these defences against the drawer or the previous holders, and
• the holder acted to the detriment of the debtor, that is, to frustrate the raising of the said defences.

Defence of contractually inconsistent completion

The defendant may argue that the third party completed, later and contrary to the agreement, the missing elements of the initially blank bill of exchange, but only if the third party acquired the bill of exchange in bad faith or upon its acquisition committed gross fault Article 10 of Law 5325/1932AP 903/2006.

Defence of forgery

If the drawer and the drawee had an agreement that the incomplete bill of exchange would be completed later, and the drawee fills in, contrary to the terms of the agreement, an element of the incomplete bill of exchange, no forgery is established AP 896/2006. If the drawer and the drawee had an agreement that the incomplete bill of exchange would be completed later, and the third-party holder fills in an element of the incomplete bill of exchange, the third party does not commit forgery, because by the transfer of the cheque it is deemed that the right to complete the bill of exchange is also transferred AP 903/2006. If the drawer and the drawee did not have an agreement that the incomplete bill of exchange would be completed, and the drawee fills in an element of the incomplete bill of exchange, forgery is established AP 896/2006.

• See also article Eviction of Tenant
• See also article Change of Name
• See also article Payment Order
• See also article Divorce
• See also article Certificate of Inheritance
• See also article Renunciation of Inheritance by a Minor
• See also article Joint Custody of a Child

FREQUENTLY ASKED QUESTIONS ON CHEQUE – BILL OF EXCHANGE – LAWYER

1. The cheque I received was stamped (dishonoured), what do I do?

When the bank stamps a cheque due to lack of available funds, the holder acquires a powerful tool of recovery. He may proceed not only against the drawer, but also against all endorsers who signed before him, as well as against any avalists. Recovery is generally achieved by application for the issuance of a payment order before the competent Court of First Instance, a swift procedure that leads to an enforceable title within a relatively short period. In parallel, the holder is entitled to file a criminal complaint for the issuance of a bounced cheque within three months from learning of the stamping, and to claim damages due to tort under Article 914 of the Civil Code (AK).

2. How can I collect the money from the drawer?

The most common and effective route is the application for a payment order, where the dishonoured cheque serves as full proof of the debt. With the issuance and service of the order, the holder acquires an enforceable title and may proceed to seizure of bank accounts, salaries, real property or movables of the debtor. In parallel, in order to prevent the transfer of assets by the drawer or the endorsers, an application for interim measures may be filed (conservative attachment, registration of preliminary mortgage). The alternative of an ordinary lawsuit is chosen when there are disputed issues of authenticity or signatures.

3. How much time do I have to act regarding a bounced cheque?

The time-limits are crucial and their loss seriously restricts the rights of the holder. The cheque must be presented to the bank within eight days from the stated date of issuance, when issued and payable in the same country. The criminal complaint for the issuance of a bounced cheque is filed within three months from the day the holder learnt of the stamping. For civil recovery, the claim against the drawer is barred by limitation in six months from the expiry of the time-limit for presentation, while the tortious claim is barred by limitation in five years. The timely instruction of a lawyer ensures that no time-limit will be missed.

4. What documents do I need for the recovery?

The basic document is the original body of the cheque with the bank’s stamp, which certifies the non-payment and the date of presentation. Also required are the certification of the drawee bank for the lack of available funds, copies of any endorsements appearing on the back, as well as identification details of the drawer and the other obligors. If the cheque relates to an underlying transaction (sale, provision of services), invoices and contracts are kept. In cases of bills of exchange, the drawing up of a protest by a notary public within the time-limits of the law is required, in order to preserve the rights of recourse.

5. What chances of collection do I really have?

Legal victory is almost certain when the cheque is valid, was timely presented and lawfully stamped, since this concerns a negotiable instrument with strict formal validity. Actual collection, however, depends on the solvency of the drawer and the other obligors. The existence of endorsers and avalists significantly increases the chances, since the holder may proceed against any of them. The swift taking of interim measures, before the debtor manages to transfer his assets, is often what makes the difference between a title on paper and actual collection of money.

6. What is the role of the lawyer in this case?

The lawyer initially examines the validity of the cheque or bill of exchange, the observance of the time-limits for presentation and the chain of endorsements, in order to identify all the obligors. He drafts the application for a payment order, handles the protective measures for the freezing of assets, files the criminal complaint for the bounced cheque and represents the holder in the criminal proceedings. In parallel, he organises the procedure of compulsory enforcement, conducts seizures and negotiates settlements where this is to the benefit of the client. The firm’s experience in negotiable instruments and commercial disputes ensures that every legal tool is timely and comprehensively employed.