Discussion in 'Finance & Banking' started by Simon Hampel, 23rd Aug, 2005.
Will a bank accept a cheque that was accidently torn in halves ?
I doubt it. Cheques have inbuilt security features, and the bank will most likely deem the integrity of those security features to have been tampered with. If they don't take that opinion, then I would really question the bank.
I don't work in a bank, this is just my opinion.
That's an interesting question Sim'.
Under the federal Cheques Act 1986 if a cheque is "lost or destroyed" the lawful holder of the cheque may request the drawer of the cheque to give a replacement cheque. If the drawer fails to comply with the holder's request, the holder can apply to court to compel the provision of a replacement.
What doesn't seem clear though (and from a quick search I couldn't find any caselaw on the point) is what does "destroyed" mean. I would have thought ripped in half would be destroyed...but there doesn't seem to be any guidance on the point.
From a practical perspective you'd be best served by speaking to the drawer and physically giving them back the torn cheque in exchange for a fresh one.
I have no idea either, often what is "law" and what is applied in reality is very different.
A good example is where I have had a few cases of minors wanting to take self servicing mortgage backed loans. Almost ALL the lenders were telling me that this is not possible and legal blah blah. Seems the legal position certainly in NSW appears that if its to the benefit to the minor, they can do a mortgage backed loan, BUT the legal beagles at the lenders give the usual blanket advice of DONT, since youd have a hard time excercising the mortgage.
All in a days fun.......................
I took the cheque into my Westpac branch the other day - the guy at the counter took one look and said "yeah, that will be fine". Apparently - so long as the machine readable code at the bottom isn't broken up (so the machine can still read it), then it should be okay. He just taped it back together and that was that.
I guess you could say "I've come to rely on the complacency of strangers"
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