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Stolen cheque liability

Discussion in 'General Forum' started by Dcmtr, Jun 24, 2010.

  1. Dcmtr

    Dcmtr New Member

    A regular client (a large organisation I have been working with for several years) sent me a payment by cheque in the post, which did not turn up on the expected date. I informed them immediately, and they chose to hang on rather than cancelling it straight away.

    Now it turns out the funds have cleared their account, indicating the cheque has been stolen and fraudulently cashed by a third party. The client is now saying there is no prospect of my receiving the payment until it is investigated, which could take 8 weeks, and they have given no indication that they will definitely re-issue the payment once they have confirmed it is fraud (for all I know, they may only be intending to reissue it if the bank which cashed the cheque accepts liability and refunds the money).

    Two questions:

    1) Does merely sending out the cheque legally constitute paying me?

    2) Assuming (hopefully) that the answer to the above question is no, am I entitled to kick up a fuss about the fact they are breaking the 30 day payment terms by not issuing a new cheque pending the potentially lengthy investigation?
     
  2. SurreyWeb

    SurreyWeb New Member

    1) Does merely sending out the cheque legally constitute paying me?

    No

    2) Assuming (hopefully) that the answer to the above question is no, am I entitled to kick up a fuss about the fact they are breaking the 30 day payment terms by not issuing a new cheque pending the potentially lengthy investigation?

    You should politely press them to pursue the matter but there's little point at this stage thinking of legal routes. If you did, that would take time and they may be able to stretch this in various ways, including due diligence which may not entirely be in their control.

    Presumably your terms have interest built in for late payment, up to you if you wish to charge that.

    Can't suggest an outcome without knowing more but the probability is that they will eventually be refunded. Regardless of that, they are still as liable as they were for the payment before the cheque was sent.
     
  3. Lupita

    Lupita Member

  4. Dcmtr

    Dcmtr New Member

    Thanks all!
     
  5. Dcmtr

    Dcmtr New Member

    Specially thanks for the free expert advice from Gary Cousins. If you are looking, I have a follow up question: Can I work around the law in future by stating in my terms and conditions that payment by cheque is only acceptable at the client's risk?
     
  6. Lupita

    Lupita Member

    Hi Dcmtr,

    Gary responded: "Yes, you can add some specific term to your terms and conditions. I am unable to advise on what your terms should be on the internet although the term you have in mind is certainly better than nothing."

    Lupita
    :)
     
  7. Dcmtr

    Dcmtr New Member

    Cheers. The end of my story is luckily the bank that cashed the cheque refunded the money, so it was okay in the end.
     
  8. Lupita

    Lupita Member

    good to know :)
     

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