Judicial principles and studies
Payment to Creditor or Agent - Payment of Wages by Cheques
This summary outlines when a cheque operates as payment for wages, the need for available funds at the due date, and the court's role in verifying funds and assessing claim value.
Updated: 10 September 2026
Prepared and reviewed by: Ashraf Al-Khawaja
Subject
The study examines whether a cheque functions as a cash-equivalent means of payment for wages, the conditions under which cheque payment discharges the debtor, the court's role in verifying availability of funds at maturity, and rules on valuation of the claim and judicial oversight, as reflected in the provided points and the referenced decision.
Summary
- A cheque can serve as a means of payment and substitute for cash if practical conditions are met. - Issuing cheques to the creditor or their agent does not discharge the debtor unless the cheques are actually collectible when presented to the drawee bank. - Payment by cheque is conditional on funds being available to pay the beneficiary at maturity; the court must verify the existence of funds on the cheque’s due date and determine the legal consequences accordingly. - An oral agreement to pay wages cannot be unilaterally revoked by one party. - Parties initially estimate the value of the claim under procedural rules, but such estimates are subject to judicial review; the court may correct the valuation if it does not follow applicable rules.
Practical significance
- Relying on cheques for wage payment requires evidence that the cheques were payable and supported by funds at the time they became due. - Courts will assess whether the facts show effective payment and will apply the legal effects based on that assessment. - Claimants and defendants should adhere to valuation rules when stating claim amounts because the court may re-evaluate noncompliant estimates. Note: This is an educational summary and not a judicial text or legal advice.
Sources and references
Verify the official text and latest amendments before relying on this material professionally.