The Cheque That Was Never Presented
In a sale of commercial equipment, Buyer issued Seller a post-dated cheque for AED 400,000, dated 1 June 2024, as security for delivery. Seller never presented the cheque. In September 2024 Seller sued Buyer on the underlying contract for the price. Buyer admits signing the cheque but argues the debt is extinguished because the cheque was not presented within six months and is now time-barred. Buyer also produces a later email in which Seller wrote: 'We will settle everything at year-end.' Seller wants to rely on that email. Buyer objects that it is a settlement offer and inadmissible. Separately, Seller's only documentary proof of delivery is a signed delivery note that Buyer says was signed by someone without authority.
1. Is Buyer correct that non-presentation of the cheque extinguishes the contractual debt?
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No. A cheque is a payment instrument, not the debt itself. Failure to present within the statutory presentation period affects the holder's recourse against drawer/endorsers on the cheque - it does not extinguish the underlying contractual obligation.
Seller sues on the contract, not the cheque. The contract claim has its own limitation period (generally 15 years for commercial obligations), unaffected by the cheque's six-month presentation window.
Buyer's argument conflates two distinct obligations. The correct analysis: non-presentation may weaken a cheque-based claim, but the price claim survives if Seller proves delivery and the agreed price.
2. How should the court treat the 'year-end' email, and what is the effect of the disputed delivery note?
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The email: A statement that 'we will settle everything at year-end' is capable of being an acknowledgement of the debt, which interrupts or restarts limitation. The 'settlement offer' objection is weaker than Buyer thinks: an unqualified acknowledgement of liability is admissible even if made in negotiation, and here the wording acknowledges the debt rather than compromising it. Seller should argue acknowledgement; Buyer must show the statement was expressly 'without prejudice'.
The delivery note: Signature by an unauthorised person does not automatically invalidate it. Seller can rely on apparent authority - the signer's role, the location, and Buyer's course of dealing. Seller should corroborate with gate records, correspondence, or subsequent part-payment.
Net effect: Seller's contract claim is strong; the email reinforces it, and the delivery note is admissible subject to proof of authority.