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The customer's obligations

The customer must be careful in drawing the cheque. If the bank is misled into paying a cheque where the customer has not fulfilled their obligations, then the bank may debit the account and the loss will fall on the customer. So, for example, where a customer filled in only the numbers for the amount to be paid and left the writing blank so that it was easy for another person to 'raise' the cheque from a small amount to a large amount, the bank would be able to debit the account of the customer. The obligation to take care extends only to the circumstances surrounding the immediate drawing of the cheque. There is no obligation to take special care of the chequebook.

The second major obligation of the customer s to notify the bank of known forgeries. In one example, a man learned that his wife was forging his name on cheques, but did not notify the bank after she promised that she would not do it again. She did forge his name on further cheques. He was held liable for the amounts, since the bank would have taken precautionary measures had it known about the forgery. This duty extends only to known forgeries. There is no contractual duty to discover forgeries, even if this could be done simply by reading the periodic statement.

The customer's obligations  :  Last Revised: Tue Mar 5th 2002
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