3rd party cheques and liability

B

bond-007

Registered User
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Have a question on 3rd party cheques.

Person (A) gives another person (B) a cheque. B goes off and gives it to a third party (C) who is a shop.

Cheque bounces for some reason. Who does the shop (C) have recourse against? B who paid gave him the cheque or A who wrote it in the first place?

Thanks
007
 
I thought all shops now refused all third party cheques unless they know the organisation i.e. big local employer. Most shops seem to have this sign up now.
 
Indeed, but this local shop seems to take 3rd party cheques from everyone and anyone.
 
C (the shop) would have presue the bearer B, B would then have to presue A. things bet a bit sticky if the cheque is crossed though.
 
contemporary said:
if the cheque is crossed though.
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If the cheque is crossed by A, then the only thing that B should be able to do with the cheque is lodge it into B's account.

My understanding is that a crossed cheque must only be lodged into the account of the person to whom it is made payable. On that basis C should not have accepted the cheque from B, so I don't see any logic other than C has to suffer the loss.
 
The issue here is that I wrote out a cheque to the person B in this case for work done, but I had to stop the cheque becuase he legged it with my stuff and did nothing.

B then went to the local supermarket and bought goods to the value of cheque. C the shop is chasing me for the money.

I assume he has no course of action against me?
 
No i dont think they have. I recently had a BOI cheque made out to me, went into BOI and they would cash it for me unless i went to the branch it was drawn on, which was the far side of the country. i therefore lodged it and it takes 6 working days to clear. So the shop should not have cashed the cheque, methinks. That day is gone.
 
bond-007 said:
The issue here is that I wrote out a cheque to the person B in this case for work done, but I had to stop the cheque becuase he legged it with my stuff and did nothing.

B then went to the local supermarket and bought goods to the value of cheque. C the shop is chasing me for the money.

I assume he has no course of action against me?
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Im nearly sure he doesnt, its been over 10 years since I did law, but cross your cheques from now on.

Case: Lewis v. Averay (1972)​
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A dishonest person proposed to purchase a car from the plaintiff and to pay for it by cheque. He claimed to be a well-known television actor, and produced a false pass from the studios bearing a photograph which resembled the aforementioned actor. The plaintiff then accepted the cheque and allowed him to take away the car. When the cheque was dishonoured, the plaintiff attempted to recover the car from the defendant who had purchased it in good faith from the dishonest person.



Held: The plaintiff could not recover the car. The contract between the plaintiff and the dishonest person was not void, but only voidable, as a result of the fraudulently induced mistake. The dishonest person had transferred the voidable title to the defendant.
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Up date on this, the person who alleges I owe him the money on the cheque came to the door last night demanding money. I told him there was nothing to discuss and promptly shut the door in his face.

Is he just clutching at straws here or does he have any case against me. I don't think so, but that do yee think?

thanks
007
 
Given that he (B) did nothing (?) in return for the money he is demanding, what case does he have? Or is it that the shop (C) is demanding the money?

Have you taken action against B given that he "legged it with your stuff", i.e. have you reported this matter (theft?) to the Gardai?
 
It is C that is trying to chase me A.

B has legged it back to eastern europe with my stuff so Shopkepper C has only me A to chase.
 
I wouldn't have thought so (and neither does my brother,who has taken Banking Law), but be aware that neither of us can offer a professional opinion in this regard.

Is C aware of why you cancelled the cheque? If you feel that C is harrassing you, I would speak to the Gardai. If they have no right to payment, they shouldn't be calling to your home and demanding anything.

Regardless of whether B has fled, I would still report him to the Gardai.
 
B was entitled to stop this cheque and its pretty obvious that C shouldnt have taken the cheque. If A bounced a cheque on B and B went to the gendarmes A would be liable. but this case is different as C took the cheque off B. maybe C can write it off as bad debts but it's a hard lesson on C, and a reminder to the rest of us not to take third party cheques.
 
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