1. What is the legal or accounting purpose of the phrase "not to exceed $500" (or some other amount) on a cheque?

  2. Who is liable should the cheque exceed the amount? The issuer? Assignee? Bank?

I often see cheques written out for some dollar amount, and then that phrase is printed somewhere else on the cheque (under the address, near the space for comment...). For instance, most recently I saw a computer printed paycheque of $789 and the phrase "not to exceed $800" near the issuer's name and address.

I could imagine that for businesses, booklets of blank cheques are printed and provided to the person with authority to sign. Such a limitation could be posed and imprinted to match the (single-) signing authority of the person in charge of that particular booklet. So if someone in accounting had a signing authority of $500, perhaps they were given a set of cheques limited to $500.

Was that the purpose? (If so, what prevents writing 2 cheques for an invoice over that amount?) And what is the purpose today, when cheques are custom printed one by one anyway, by a system that persumably could limit the amounts based on the authorization of the accounting system's user?

  • @SJuan76 it seems to me that restrictions on the validity of a check are not particularly relevant to managing one's finances (at least not in the abstract), but rather are a question of law. A question such as "I received a check for more than $500 that says 'not to exceed $500'; what do I do?" would perhaps be on topic there.
    – phoog
    Nov 11, 2023 at 9:52
  • 1
    @SJuan76 indeed I was interested in the question of law, as phoog points out. I considered your suggested but decided to let the question simmer here for a few days. Looks like we have a good answer.
    – P2000
    Nov 12, 2023 at 18:46

1 Answer 1


What is the legal or accounting purpose of the phrase "not to exceed $500" (or some other amount) on a cheque?

This is done to prevent someone in possession of the check from cashing or depositing the check in a larger amount than stated.

This is partially to prevent the person writing the check from exceeding their authority. If that person uses more than one check in the same transaction, or just writes a check in excess of the limit stated on the face of the check, their knowledge that they were acting without authority and resulting liability for the excess amount to the checking account owner is clear.

It is also partially to discourage someone from trying to fraudulently alter an otherwise authentic check by adding words and numbers that purport to increase dollar amount of the check to an amount greater than this limit.

For example, a criminal might add the words "One thousand and" in blank space on the line for the amount of the check in words in front of the pre-existing words "twenty-six and no/100") and add "1,0" in front of the existing "26.00" in the number box on the check, in the same color ink, with the same handwriting or the same font as the original for typewritten additions.

Who is liable should the cheque exceed the amount? The issuer? Assignee? Bank?

Generally speaking, all of the following people could have liability: (1) someone who writes a check in excess of that amount without authority to do so that is later honored, (2) someone who modifies an otherwise valid check that is later honored, (3) someone who deposits or cashes a check in excess of this amount at a bank, and (4) a bank that accepts and honors the check notwithstanding the notice apparent on the face of the check.

Where more than one person is liable, a more culpable person will usually have to indemnify the less culpable person who is liable for the loss that they suffer as a result.

  • What would happen if a check written in excess of such a restriction were offered to satisfy a debt, and the question of whether the debt had been satisfied came up in court? Would the check also be considered worthless in that context?
    – phoog
    Nov 11, 2023 at 9:57
  • @phoog It would probably be considered worthless.
    – ohwilleke
    Nov 11, 2023 at 16:19
  • If the cheque is for $600 and says “not to exceed $500”, is it worthless or worth $500? Assuming the $600 is not forged?
    – gnasher729
    Nov 13, 2023 at 17:56
  • @gnasher729 Probably worthless.
    – ohwilleke
    Nov 13, 2023 at 19:20

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .