Definition
A Drawee is the party designated by a depositor (often a bank) to pay a specified sum of money to the person presenting a check or draft written by the depositor. Think of the drawee as the good Samaritan with the checkbook, ready to fill your pockets with cash when presented with the appropriate paperwork!
Drawee vs. Drawer Comparison Table
| Aspect | Drawee | Drawer |
|---|---|---|
| Definition | The entity that pays the check | The person or entity who writes the check |
| Role in the check-based transaction | Receives the check and dispenses cash | Initiates the transaction by issuing a check |
| Example | A bank cashing your paycheck | Your employer who writes you the check |
| Responsibility | Must have sufficient funds to pay | Must ensure funds are available in their account |
| Risk of fraud | High, if not validated correctly | High, if they don’t have funds available |
Examples
- Scenario 1: You hand your paycheck (a check) from your employer to your bank. The bank is the drawee ready to pay you the amount specified.
- Scenario 2: If you visit a check-cashing service—like ones based in airports or convenience stores—they act as the drawee but will charge you a service fee that’s higher than your toddler’s sugar rush!
- Scenario 3: When using a coupon in a retail transaction, the store acts as the drawee, efficiently working to subtract those cents from your total, ensuring you don’t break the bank every grocery run!
Related Terms
- Check: A written, dated document that directs a bank to pay a specific amount of money from a person’s account to the payee.
- Payee: The recipient of the money from a drawee as dictated by the terms of the check.
- Drawer: The individual or institution that writes out the check, initiating the transaction.
Illustrative Diagram in Mermaid Format
graph TD
A[Drawer (Employer)] -->|Writes Check| B[Drawee (Bank)]
B -->|Cash or Deposit| C[Payee (You)]
Humorous Citations & Fun Facts
- Cliché: “Money can’t buy happiness, but it can buy a fancy check—just don’t try to take it to the grocery store!”
- Trivia: The term ‘drawee’ originates from the French term ‘dârer’, dating back to the use of checks way before someone thought, “why not just transfer money using magic?”
Frequently Asked Questions
Q1: Can a drawee refuse to pay?
A: Yes, if the drawer’s account lacks sufficient funds or if the check includes mistakes that make it invalid. It’s like showing up to a black-tie event in flip-flops—sometimes, you just won’t be allowed in!
Q2: Who is liable if a drawee does not cash a check?
A: Normally, the drawee must honor valid checks, but a lot depends on local laws and situations. Think of it as a group project where everyone has a role, but one person slacks off!
Q3: Is a check endorsed by the payee considered money?
A: A check is a promise to pay, not actual cash—kind of like you promising not to eat all the snacks before the movie starts!
References for Further Study
- Investopedia: Drawee
- Book: “Payments System: Design, Governance and Oversight” by David B. McHide and Showan Maisel
- Article: Understanding Checks & Check Writing
Test Your Knowledge: Drawee Challenge Quiz
## Who is the drawee when you cash a check from your employer?
- [x] Your bank
- [ ] Your refrigerator
- [ ] Your cat
- [ ] The mailman
> **Explanation:** Your bank acts as the drawee in cashing a check, not your refrigerator (unless it dispenses cash, then you're in a sci-fi story!).
## What does a drawee do with a cheque?
- [x] Pay the specified amount
- [ ] Frame the cheque for decoration
- [ ] Return it to sender
- [ ] Donate it to charity
> **Explanation:** A drawee’s job is to pay the amount specified, not host a gallery opening for fine checks.
## If a customer uses a coupon, who becomes the drawee?
- [x] The retail outlet
- [ ] The coupon company
- [ ] The customer
- [ ] The delivery person
> **Explanation:** The retail shop is the drawee when you use a coupon, not the delivery person who probably just wants a day off!
## What happens if a dispensed check bounces?
- [x] The payee gets nothing
- [ ] The payee gets to pet a unicorn
- [ ] The drawee plays catch with it
- [ ] It's a game of double trouble
> **Explanation:** When a check bounces, the payee gets nada! No unicorns are involved, sorry.
## Which of the following is not a function of the drawee?
- [ ] Cashing checks
- [x] Writing checks
- [ ] Verifying signatures
- [ ] Ensuring sufficient funds
> **Explanation:** The drawee doesn’t write checks; they just get the fun job of cashing them!
## Can a drawee be held liable if they pay a fraudulent check?
- [x] Yes, under certain conditions
- [ ] No way, José!
- [ ] Only if it looks funny
- [ ] It’s all fun and games until someone signs wrong.
> **Explanation:** A drawee can sometimes be liable if they honor a fraudulent check without properly verifying it—so always check twice!
## What are the penalties for presenting a forged check to a drawee?
- [ ] Free drinks for a year
- [x] Legal consequences
- [ ] A thank-you note
- [ ] A public trophy for best forger
> **Explanation:** Presenting a forged check can land you legal consequences, not trophies (unless you’re counting the “Most Wanted” List!).
## Which party is the drawer in a typical check scenario?
- [x] The individual or entity that writes the check
- [ ] The one holding the check
- [ ] The cat who sits on the check while you search for it
- [ ] The dog who probably dug it up
> **Explanation:** The drawer writes the check—and no pets involved, except for moral support!
## If you present a check and it is returned for insufficient funds, who is at a loss?
- [ ] Your cat
- [x] You
- [ ] The drawer
- [ ] The bank that keeps your secrets
> **Explanation:** If a check bounces, you, as the payee, are likely left empty-handed—talk about an emotional rollercoaster!
## Who has the final say in paying a check?
- [x] The drawee
- [ ] The drawer
- [ ] Your wallet
- [ ] The stock market
> **Explanation:** The drawee has the last word when it comes to cashing a check! Your wallet might just roll its eyes.
“May your drawee always be solvent and your checks always clear!”
