Multiple choice

Which of the following conditions should be fulfilled for a bank to get protection against conversion of a cheque?

(a) The collection should be for a customer (b) The collection should be of a crossed cheque, crossed before falling into the hands of the collecting bank (c) The collection should be in good faith (d) The collection should be without negligence

  1. Only (a) and (d)

  2. Only (a) and (c)

  3. Only (a), (c) and (d)

  4. All of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The collection should be for the apparent tenor of the instrument in good faith and without negligence to any person in possession thereof under circumstances which do not afford a reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned. However, (b) is incorrect.

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