Definition of Blank Check
A blank check often refers to a check that has been signed by an authorized check signer without completing the other information (date, payee, amount).
A blank check could also refer to the completely blank checks that are received from a check printing company. These blank checks have not been signed. These checks are sometimes referred to as check stock and should be stored in a secure place until they are inserted into the company’s printer for paying suppliers, etc.
Lastly, “blank check” sometimes indicates that a large, uncertain amount will be disbursed for a specific purpose. For instance, a wealthy grandparent may tell a grandchild that the full cost of getting a college education will be fully paid by the grandparent.
Example of Blank Check
For an example of a pre-signed blank check, assume that a small company has a checking account and the only authorized check signer is the owner. The owner is going to take a short vacation and will have the office manager be in charge. In case a payment must be made when the owner is on vacation, the owner gives the office manager three of the company’s checks bearing only the owner’s signature. Basically, the owner is trusting that the office manager will complete these checks only for a legitimate business transaction.
This is obviously a poor practice since the office manager could violate the owner’s trust and issue the checks for any amount and to any person.
Even if the office manager is a dependable, honest employee, the signed blank checks might be discovered by another person who then completes the check with any name and amount.
