The cheque has its origins in the ancient banking system, in which customers would issue orders to their bankers to pay money to named recipients. Over the past 350 years or so the cheque has evolved from a basic ‘bill of exchange’ to the form we know today.
Cheques are not legal tender, rather legal documents whose use is governed by the Bills of Exchange Act 1882 and the Cheques Acts of 1957 and 1992.
Bills of exchange
The history of the cheque dates back to the 13th century in Venice when the bill of exchange was developed as a legal device to allow international trade without the need to carry around large amounts of gold and silver. Their use was subsequently adopted in France, and from there the practice was brought to England.
The first known reference to these bills in English law is in a 14th century statute, which states that they could be used to carry funds out of the country. Back then bills were for international business use and were not used for trades within England or by individuals. The bills were usually payable abroad at a future date and in a currency other than that of the drawer’s home country.