<\/li>\n<\/ul>\nBeyond this the customer does not have any wider obligation to take precautions so as to prevent fraud or forgery.\u00a0 He need not cheque his bank statements, but when he becomes aware as above, he must tell the bank promptly.<\/p>\n
The Cheque Act removes the necessity for the cheque to be endorsed to the bank.\u00a0 Where a bank pays a cheque or other bill in good faith in the ordinary course of his business, it is not obliged to show that the endorsement of the payee or subsequent endorser was made under the authority of the person whose endorsement reports to be.<\/p>\n
The\u00a0 payment is good and deemed in due course although the endorsement has been forged or made without authority, the bank is entitled to receive only signature are genuine and authorised, but it must pay the bill in good faith in the ordinary course of business.\u00a0 Even if it is negligent regarding the signatures, it is protected.\u00a0 The provision does not apply where there are no endorsements or there are irregular endorsements.<\/p>\n
Where a paying banker pays a crossed cheque in good faith and without negligent to a banker (in the case of general crossing) or the banker doesn\u2019t been specially crossed or his agent, the banker and the drawer are entitled to the same rights and deemed to be in the same position as if payment was made to the true owners.<\/p>\n
The Cheques Act applies to irregular and absent endorsement.\u00a0 It provides where a banker in good faith and in the ordinary course of business pays a cheque which is not endorsed or is irregularly endorsed, he does not incur liability by reason only of such irregularity or absence and is deemed to have paid it in due course.\u00a0 As above, it is enough that the banks acts in good faith and it is not necessary to prove the absence of negligence.<\/p>\n
An irregularity might be a nonmatching of name or similar discrepancy.<\/p>\n
The paying bank must have paid cheque to the payee or other endorsee.\u00a0 The requirements of crossing must be met.\u00a0 T<\/p>\n
The bank is not entitled to follow its mandate blindly if there are very good reasons for believing the actions are unlawful.\u00a0 For example if an authorised employee draws cheques on themselves which are highly unusual, the company may be entitled to recover money.\u00a0 Similarly if an unlawful transaction takes place which is patent to the bank, the true owner may be entitled\u00a0 to recover money.<\/p>\n
The above propositions follows in the bank’s general duty to exercise skill and care.\u00a0 Although persons may be presumed to be honest, where unusual transactions takes place, the duty to enquire may arise.\u00a0 The failure to enquire may leave the bank liable.<\/p>\n
Death\u00a0 or insolvency of customer.<\/p>\n
The banks mandate to pay is terminated by notice of the customer’s debt.\u00a0 The debt of itself does not affect the termination.<\/p>\n
Where a customer becomes bankrupt or insolvent, payments made after presentation of the petition may be void.\u00a0 The insolvency legislation protects the bank making payments in good faith without notice of the petition.<\/p>\n
In a corporate bankruptcy, payments may be authorised by the court and this may be necessary.<\/p>\n
The paying bank owes duty to the true owner of the cheque.\u00a0 Breach of this obligation may lead to liability for conversion.<\/p>\n
Where a bank pays a cheque to a person not entitled, it may be liable to the true owner for the value of the cheque.\u00a0 However, where there has not been unjust enrichment as a result of the payment such as where the payment discharge an obligation of the drawer to the party paid, then the bank will be subrogated to the third party’s rights against the drawer.\u00a0 If the payment is ineffective and the third party has not changed his position in reliance with the payment or acted in bad faith, the bank is entitled to recover the money paid as a mistake of fact.<\/p>\n
Where bank pays money by mistake to its customer, it is generally entitled to recover the sum back.\u00a0 However, if the customer was misled by the error or has changed its position in reliance that it would be inequitable to require full payment.\u00a0 The bank may not be able to recover payment.<\/p>\n
Where a banks pays under forgery, it may recover from the payee on this basis.\u00a0 It may recover from the collecting bank, if it does not parted with the money.<\/p>\n
If a bank pays in a countermand cheque, it may be entitled to recover money where the money is not due.\u00a0 If the money is still owed, the bank may still be entitled to recover.\u00a0 This proposition however appears questionable as the third party would be not aware of the — if the third party is not aware of the countermand.<\/p>\n\n
\n <\/div>\n\n","protected":false},"excerpt":{"rendered":"
Nature A cheque is a bill of exchange drawn on a bank payable on demand.\u00a0\u00a0The provisions of the Bills of Exchange legislation apply generally to cheques.\u00a0 See the separate chapters in relation to the principles applicable. A cheque is fundamentally a direction to pay rather than an instrument that is intended to be postponed, negotiated, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[42],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/453"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=453"}],"version-history":[{"count":3,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/453\/revisions"}],"predecessor-version":[{"id":460,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/453\/revisions\/460"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=453"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=453"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=453"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}