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• How does iranian law define a check ?
• Are there specific laws regarding checks ?
• What are the particulars of a check ?
• Should the check be payable on sight?
• What is the time-limit for demanding payment of a check ?
• What are the consequences of not observing the time-limit ?
• What types of checks are drawn in Iran ?
• Is the issuance of a check considered a commercial act ?
• Who is considered the holder of a check ?
• What are the regulations respecting bad checks ?
• Do bad checks entail punishment for the drawer ?
• Does the punishment also apply to conditional bad checks ?
• Is there any time-limit for filing a complaint against the drawer of a bad check ?
• Can a bad check be assigned to third party ?
• What is the main procedure to be taken in prosecution of bad checks?
• What measures can be taken by the drawer in instances when the check is lost or stolen ?
• Are endorsers of a bad check also culpable ?
• Is prosecution possible regarding issuance of bad checks drawn on foreign banks ?
• As for the sum of a check, should it be only in Iranian Rials ?

How does iranian law define a check ?

Article 310 of the Commercial Code stipulates that a Check is a document in accordance with which the drawer withdraws or transfers to another person, all or part of the cash he holds with the drawee. The drawee is usually a bank branch.

Are there specific laws regarding checks ?

Matters related to checks are defined under the regulations set out in Articles 310-317 of the Commercial Code and also in all the articles of the Check law.

What are the particulars of a check ?

Checks are normally used in print form and should contain the date of issue and bear the signature of the drawer. A check can be a bearer's check, or may be made out in the name of a specified person or to his order it can be transferable to a third party simply by endorsement on the reverse side.

Should the check be payable on sight?

According to Articles 311 and 313 of the Commercial Code, the payment of a check can not be kept pending and should be cashed on sight. Therefore, a check should be paid immediately on presentation. Article 13 of the Check Law prohibits drawing of post-dated check. Article 3 of the said law, stipulates that on the date of issuance of the check, the drawer of the check must have an amount in the form of cash or credit equivalent to that indicated in the check with the bank on which the check is drawn. He must not withdraw from the bank the whole or part of the amount on the basis of which he has drawn the check, or issue instructions to stop payment on the grounds that the signature does not correspond to the specimen signature. In addition, there should be no crossings out in the text of the check or other discrepancies in the contents of the check. Where a condition has been stipulated in the text of the check, the bank shall disregard such a condition. If for lack or shortage of funds or for any other reasons the amount of the check can not be paid, the bank is obliged to issue to the beneficiary a non-payment certificate .

What is the time-limit for demanding payment of a check ?

If a check is payable where drawn, its holder should demand payment within fifteen days of the date of issue of the check . If it is drawn from one region on another in Iran, it should be claimed within forty-five days of the date of issue. With respect to checks issued abroad but payable in Iran, the time limit is four months from the date of issue .

What are the consequences of not observing the time-limit ?

If the holder of the check fails to claim payment within the said time-limit, he forfeits his right of recourse against the endorser . In the even that the amount of the check is lost for reasons in connection with the drawee, the holder forfeits his legal right of recourse against the drawer as well.