Waiver of Demand
What it is:
How it works (Example):
Sometimes, the bank account a check or bank draft is drawn against does not contain the funds necessary to cover the payment amount. When a payee endorses a check or bank draft, a waiver of demand is consummated. This means that if the writer of the check does not have enough money in his/her account to cover the check, the payee assumes liability for the overdraft.
For example, suppose Bob has a check from Jack for $50. Bob executes a waiver of demand by signing the back of the check. This means that if Jack has less than $50 in his checking account, Bob is responsible for the check bouncing.