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The phrase "Void After 90 Days," or some variation thereof, has long appeared on many checks. It's a restriction designed to protect the check issuer, but is it really enforceable? Is a bank liable if it honors payment of that check? A recent Illinois appellate court decision answered these questions with a resounding "No."
In the case of Aliaga Medical Center S.C. v. Harris Bank N.A., the court rejected a customer claim that BMO Harris bank improperly cashed its check, which bore the "Void After 90 Days" notation. This decision scores an important victory for banks across the nation and serves as a cautionary tale for bank customers, while defining a new rule of law.
First, the decision acknowledges the reality of modern banking and check process-ing, in which banks electronically process thousands of checks per day and cannot be expected to physically inspect each check for restrictive language. Thus, where a customer has printed such language on a check, the bank is not...