how waivers of demand work
typically there are three parties involved when a check or bank draft is written the drawer the payee and the drawee the drawer is the original writer of the check or daft the payee is the party to whom the check or draft is written and the drawee is the party from whose account the funds will be withdrawn if a particular check or draft carries a waiver of demand then this means that the endorser has accepted legal responsibility for its fulfillment should the drawer of the check or draft default then the endorser will take responsibility for honoring the check and paying any fees or penalties that may have been incurred in the context of banking the term waiver of demand can also refer to a bank s waiver of its right to formal notification when it presents short term negotiable debt instruments such as drafts or banker s acceptances to a federal reserve bank for rediscounting in such instances the federal reserve considers the bank s endorsement as a waiver of demand notice and protest if the original issuer defaults on its debt obligation real world example of a waiver of demandto illustrate suppose john writes a check to pay for goods purchased from kevin in this situation john is the drawer kevin is the payee and john s bank is the drawee if another party provides an endorsement to john by signing the back of his check then that party is executing a waiver of demand accordingly the endorser would be responsible for honoring john s check if it bounces due to insufficient funds or any other reason similarly the waiver of demand would cause the endorser to become responsible for any fees or penalties triggered by the bounced check in that scenario the bank would send john a bad check notice indicating that the check bounced and informing him of any applicable penalties 