1. Duty of Care: The customer is bound to the exercise reasonable care when
drawingcheques to guard against alterations. The banker is not liable for any loss arising if
the customer has failed to exercise reasonable care.
In London Joint Stock Bank v. Macmillan & Arthur, A clerk of M draw a cheque for M?s
is signature and indicating the amount payable as £2 in figures but not in words. M signed
the cheque, the clerk added 2 figures to the two to make it £120 and stated the amount in
words. The customer subsequently sued the banker for the loss. It was held that the bank
was not liable as M had failed to exercise reasonable care.
2. Notice of irregularities: The customer is bound to notify the banker of any irregularities
affecting the accounts e.g. forgeries or unauthorized which the customer is estopped from
relying on the irregularity.
As was the case Greenwood v. Martins Bank where a husband had noticed that his wife
had withdrawn monies from his account by forging signature but to avoid publicity, he did
not notify the bank. Subsequently his wife shot herself dead. He then notified the bank of
the irregularities. The House of Lords hold that the bank was not liable as the customer
had failed to notify if of the irregularity. He was stopped from relying on it.
sharon kalunda answered the question on April 12, 2019 at 13:56
- Discuss the types / classification of cheques.(Solved)
Discuss the types / classification of cheques.
Date posted: April 12, 2019. Answers (1)
- How does a cheque differ from a bill of exchange. (Solved)
How does a cheque differ from a bill of exchange.
Date posted: April 12, 2019. Answers (1)
- Outline the characteristics of Negotiable Instruments.(Solved)
Outline the characteristics of Negotiable Instruments.
Date posted: April 12, 2019. Answers (1)
- What is a negotiable instrument?(Solved)
What is a negotiable instrument?
Date posted: April 12, 2019. Answers (1)
- State ways in which an Agency is created.(Solved)
State ways in which an Agency is created.
Date posted: April 12, 2019. Answers (1)
- How does bailment differ from agency?(Solved)
How does bailment differ from agency?
Date posted: April 12, 2019. Answers (1)
- What is the difference between Trust and Agency?(Solved)
What is the difference between Trust and Agency?
Date posted: April 12, 2019. Answers (1)
- Highlight TWO similarities between Agency and Trust.(Solved)
Highlight TWO similarities between Agency and Trust.
Date posted: April 12, 2019. Answers (1)
- Discuss the essentials of an insurance contract?(Solved)
Discuss the essentials of an insurance contract?
Date posted: April 12, 2019. Answers (1)
- What is insurance?(Solved)
What is insurance?
Date posted: April 12, 2019. Answers (1)
- Highlight the factors that are NOT affected by Non Registration of a Partnership Form of Business Organization.(Solved)
Highlight the factors that are NOT affected by Non Registration of a Partnership Form of Business Organization.
Date posted: April 12, 2019. Answers (1)
- Highlight the consequences of Non Registration of a Partnership Form of Business Organization.(Solved)
Highlight the consequences of Non Registration of a Partnership Form of Business Organization.
Date posted: April 12, 2019. Answers (1)
- Outline the types of members in a partnership.(Solved)
Outline the types of members in a partnership.
Date posted: April 12, 2019. Answers (1)
- State the characteristics of contract of guarantee.(Solved)
State the characteristics of contract of guarantee.
Date posted: April 12, 2019. Answers (1)
- Discuss three types of contract of guarantee.(Solved)
Discuss three types of contract of guarantee.
Date posted: April 12, 2019. Answers (1)
- Outline the two types of indemnities.(Solved)
Outline the two types of indemnities.
Date posted: April 12, 2019. Answers (1)
- Highlight ways in which the hire purchase act attempts to protect the hirer for exploitation. (Solved)
Highlight ways in which the hire purchase act attempts to protect the hirer for exploitation.
Date posted: April 12, 2019. Answers (1)
- State the purposes served by the registration of a hire purchase agreement.(Solved)
State the purposes served by the registration of a hire purchase agreement.
Date posted: April 12, 2019. Answers (1)
- Highlight the circumstances under which the Registrar may refuse to register a Hire Purchase Agreement.(Solved)
Highlight the circumstances under which the Registrar may refuse to register a Hire Purchase Agreement.
Date posted: April 12, 2019. Answers (1)
- State the content of the Hire Purchase agreement. (Solved)
State the content of the Hire Purchase agreement.
Date posted: April 12, 2019. Answers (1)