Robert A. Marsico
Partner
201-896-7165 rmarsico@sh-law.comFirm Insights
New Law Protects New Jersey Businesses From Bad Electronic Transfers
Author: Robert A. Marsico
Date: September 26, 2014
Key Contacts
Back
While paper checks have been replaced by electronic funds transfers for many commercial transactions, New Jersey businesses still have to contend with rejected payments. Earlier this month, Gov. Chris Christie signed two measures into law that will help New Jersey businesses address bad electronic funds transfers.
The first new law, Assembly Bill 1162, amends New Jersey’s existing law concerning the issuing or passing of bad checks. The new law makes it clear that electronic funds transfers are included within the scope of the statute.
The existing New Jersey law applies to checks, drafts, and orders of withdrawals that are dishonored for lack of funds or because the maker does not have an account with the drawee. It provides a process for the payee to send the maker a demand for payment using a specific form, which indicates the amount owed. If the maker fails to pay the amount within 35 days of the date of the mailing of the demand for payment, the maker is subject to monetary damages, which may not exceed the amount of the check, draft, order, or electronic funds transfer by more than $500. Businesses can enforce their rights by filing a civil action in a court of competent jurisdiction. The same process now also applies to electronic funds transfers.
Individuals who knowingly make bad electronic transfers now also face criminal penalties. The second law, Assembly Bill 1153, amends New Jersey’s criminal statute (N.J.S.A.2C:21-5) that governs criminal liability for the issuance or passage of bad checks to clarify that electronic funds transfer are included within the scope of covered offenses.
Under the prior statue, a person violates the law if he issues or passes a check knowing that it will not be honored by the drawee. The amendment makes it clear that a person also commits an offense under this section if he authorizes an electronic funds transfer knowing that it will not be honored by the drawee. The amount of the check or electronic fund transfer determines the grading of the offense, which can range from a disorderly persons offense to a second-degree crime.
For specific tips to help your New Jersey business get paid, please check out our prior post.
- Business
- New Jersey Business Litigation Attorney
- New Jersey Business Regulations
- New Jersey Employment Attorney
- NJ attorney Scarinci
- Scarinci Hollenbeck
- Securities and Finance
- Practices: Corporate Transactions & Business, Financial Services & Regulatory Practice, Litigation, Commercial Litigation - Business Litigation Attorney
- Locations: Red Bank, NJ, Little Falls, NJ, New York City
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Author: Angela A. Turiano
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications
Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Author: Dan Brecher
Changes to Qualified Small Business Stock Will Benefit Startup Founders and Investors
The One Big Beautiful Bill Act of 2025 (OBBBA) significantly impacts federal taxes, credits, and deductions. A key change relating to Qualified Small Business Stock (QSBS) allows greater tax-free gains for investments in startups and other qualifying small businesses. Company founders and other investors should understand how the enhanced tax strategy works or risk missing […]
Author: Dan Brecher
Corporate Consolidation and Antitrust Issues in Mergers
Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]
Author: Dan Brecher
What is Business Law and Why Is it Important?
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.