94Protection of drawee institution paying cheque lacking indorsement or with irregular or unauthorised indorsement

94 Protection of drawee institution paying cheque lacking indorsement or with irregular or unauthorised indorsement

(1) Subject to subsection 32(1), where: (a) the drawee institution, in good faith and without negligence, pays a cheque, whether or not to a financial institution; and (b) an indorsement has been written or placed on the cheque without the authority of the person whose indorsement it purports to be; the drawee institution: (c) does not, in paying the cheque, incur any liability by reason only of: (i) the indorsement having been written or placed on the cheque without the authority of the person whose indorsement it purports to be; or (ii) its failure to concern itself with the genuineness of, or the existence of authority for, the indorsement; and (d) shall be deemed to have paid the cheque in due course. (2) Subject to subsection 32(1), where: (a) the drawee institution, in good faith and without negligence, pays a cheque to a financial institution; and (b) the cheque is not indorsed or is irregularly indorsed; the drawee institution: (c) does not, in paying the cheque, incur any liability by reason only of the absence of, or the irregularity in, the indorsement; and (d) shall be deemed to have paid the cheque in due course.