UAE: Up to 2 Years in Jail and Fines Exceeding Dh5,000 for Improper Cheque Signatures

Question: What are my rights if I sold my car and the post-dated cheque bounced due to the buyer's intentional signature error?

Answer: In the UAE, a valid cheque must include the word "cheque," an unconditional payment order, the drawee's name, the payee's name, place and date of issuance, and the drawer's signature, as specified in Article 627 of the Commercial Transactions Law.

If a cheque bounces due to an intentionally incorrect signature, the drawer may face severe penalties. Under Article 675, individuals can be sentenced to six months to two years in prison and/or fines ranging from 10% of the cheque's value to a minimum of AED 5,000, not exceeding double the cheque's value.

Additionally, intentionally signing a cheque incorrectly can be deemed a breach of trust, punishable under Article 453 of the Crimes and Penalties Law, which addresses the misuse of funds or instruments entrusted to someone.

If you receive a cheque from the buyer of your car with an incorrect signature, first request a correct cheque. If the incorrect signature was deliberate, you may pursue legal action to recover the amount owed, including filing a complaint with the relevant UAE court for both civil and criminal recourse.

News Source: Khaleej Times