Commonwealth Consolidated Acts

CHEQUES ACT 1986 - SECT 94

  (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.