Categorization plays a key role in legal reasoning but it has been under-theorized, particularly within common law legal systems. In this article, the author uses the Canadian law governing cheques to illustrate two different theories of categorization. The law governing ordinary cheques is relatively certain and the results of its application are mostly predictable. However, when that law is applied to variations on the basic form – to post-dated, certified, and double-dated cheques – the results are wildly unpredictable. The reason for this, the author argues, is the theory of categorization embodied in the governing legislation, the Bills of Exchange Act. That act assumes cheques can be defined by a list of necessary and sufficient conditions. However, such a theory cannot account for consumer and corporate practices. A theory of categorization based upon prototypes is necessary to explain the variations. They are systematic and coherent elaborations of a central model. They are not arbitrary because they are constrained by a prototype, but neither are they predictable. The theory of categorization assumed by the law obscures the complexity and fluidity of even such a seemingly simple category as cheques. A prototype theory of categorization, on the other hand, explains both the structure of the category, accounting for the variations, and the source of the law's indeterminacy.