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Simple English definitions for legal terms
memorandum check
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A quick definition of memorandum check:
A memorandum check is a piece of paper that you can use to pay someone money. It's like a promise to pay, but you don't have to give them the money right away. Instead, you can give them the check and they can cash it later when they need the money. It's important to make sure you have enough money in your bank account to cover the check, otherwise it won't work and the person you gave it to won't get their money.A more thorough explanation:
A memorandum check is a type of check that a borrower gives to a lender for a short-term loan. The borrower writes the check for the amount of the loan, but the lender agrees not to cash it until the loan is due. This type of check is also known as a postdated check.
For example, if John borrows $500 from his friend Jane, he might write her a memorandum check for $500 with the understanding that she will not cash it until the loan is due in two weeks. This allows John to get the money he needs now and pay it back later.
Memorandum checks are not considered legal tender until the date they are postdated for. This means that if the lender tries to cash the check before the agreed-upon date, the bank may not honor it.