There are special rules in relation to cheques that are designed to protect banks against the risk of liability. Where a bank acts in good faith in the ordinary course of business, the bank is entitled to accept as genuine, all signatures and endorsements on a cheque.\u00a0 It is not obliged to enquire as to whether they are forgeries.\u00a0 Where a cheque is paid in good faith in accordance with its crossing and the bank has acted in good faith and without negligence, the paying bank is deemed to have paid it to the true owners.<\/p>\n
The protection does not apply if the endorsement is irregular e.g. the names do not match. A further provision in the Cheques Act provides that where a banker acts in good faith in the ordinary course of business in relation to a cheque that is not endorsed or irregularly endorsed, it does not incur liability by reason of the absence or regularity of endorsement.\u00a0 If the surrounding circumstances are suspicious or there are obvious mismatches in the name the bank may not be held to have acted in the ordinary course of business.<\/p>\n
The collecting bank also enjoys certain protection. \u00a0Where a collecting banker in good faith without negligence receives payment for a customer of an instrument and the customer has no title or defective title, the banker has no liability to the true owner of the instrument by reason of receiving payment.\u00a0 The recipient must be a customer.\u00a0 The Cheques Act provides the banker is not to be deemed negligent by reason only of failure to concern himself with the absence or irregularity of endorsements.<\/p>\n\n
\n <\/div>\n\n","protected":false},"excerpt":{"rendered":"
Acceptance and Payment Acceptance may be by payment or by commitment to pay on the designated future date, as the instrument provides. In the case of a cheque, the bank effectively accepts, it by making payment on it Where the bill provides for payment after a period, the drawee bank may accept it and thereby […]<\/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\/589"}],"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=589"}],"version-history":[{"count":1,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/589\/revisions"}],"predecessor-version":[{"id":590,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/589\/revisions\/590"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=589"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=589"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=589"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}