Document ID: chunk:federal_register_of_legislation:C2017C00074:section:94
Version: federal_register_of_legislation:C2017C00074
Segment Type: section
Provision Reference: s 94
Character Range: 91944–93257

94  Protection of drawee institution paying cheque lacking indorsement or with irregular or unauthorised indorsement
 (1) Subject to subsection 32(1), where:
 (a) the drawee institution, in good faith and without negligence, pays a cheque, whether or not to a financial institution; and
 (b) an indorsement has been written or placed on the cheque without the authority of the person whose indorsement it purports to be;
the drawee institution:
 (c) does not, in paying the cheque, incur any liability by reason only of:
 (i) the indorsement having been written or placed on the cheque without the authority of the person whose indorsement it purports to be; or
 (ii) its failure to concern itself with the genuineness of, or the existence of authority for, the indorsement; and
 (d) shall be deemed to have paid the cheque in due course.
 (2) Subject to subsection 32(1), where:
 (a) the drawee institution, in good faith and without negligence, pays a cheque to a financial institution; and
 (b) the cheque is not indorsed or is irregularly indorsed;
the drawee institution:
 (c) does not, in paying the cheque, incur any liability by reason only of the absence of, or the irregularity in, the indorsement; and
 (d) shall be deemed to have paid the cheque in due course.

Division 2—The collecting institution