Business Glossary

to refuse to pay, as in the case of a check that is returned by a bank because of insufficient funds.

1. refusal by a drawee bank to accept a promissory note, or to pay a check or draft, as might happen if the check writer's account has insufficient funds. To collect payment, the holder of the instrument must look to the endorsers or guarantors through a legal process known as protest . But, unless the drawee bank gives prompt notice, by returning the check the same day, the endorser's liability is voided.
2. refusal by a check writer or maker to pay a check or other negotiable instrument. See also notice of dishonor wrongful dishonor .

refuse, rightly or wrongly, to make payment on a negotiable instrument when such an instrument is duly presented for payment.