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CHEQUES DEFINITION AND CHARACTERISTICS, CROSSING OF CHEQUES, ALTERATION ON A CHEQUE AND PROTECTION OF COLLECTING AND PAYING BANKER. The Act governing CHEQUES is the BILL OF EXCHANGE ACT 1949 (revised 1978) S 73 of the Act defines cheques as “ bill of exchange drawn on a banker and payable on demand”. The combination of S3 & 72 of the Act provides the following CHARACTERISTICS:- 1. Its an unconditional order in writing 2. Signed by the drawer 3. Drawn on a banker 4. Orders bank to pay sum certain in money(drawee) 5. Drawn in favour of a specified person(payee)
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Crossing of Cheques A drawer crosses a cheque to make it difficult for a thief to obtain payment across a counter. The OBJECTIVE is to minimise fraud by giving instructions as to the manner of payment. These instructions are to the PAYING BANKER but a crossing a crossing ‘Account Payee’ or A/c payee is an instruction to the collecting banker.
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