Explain the types of crossing of cheques and the circumstances in which a banker may refuse to pay a cheque.
How to lay out the answer. Follow the frame, then write it in your own words.
1 · Open in two lines. A cheque is a bill of exchange drawn on a banker and payable on demand. Crossing makes it safer by controlling how it is paid.
2 · Draw the crossings. [Sketch: two parallel lines; '& Co.'; a bank name; 'not negotiable'; 'account payee only']
3 · Explain each crossing.
Open: cash at the counter.
General: only through a bank account.
Special: only through the named bank.
'Not negotiable' and 'account payee only': effects.
4 · Grounds for refusal. No funds, signature mismatch, words and figures differ, stale, post-dated, stopped, notice of death or insolvency, court order, alteration.
5 · Banker's duty. Honour properly drawn cheques; wrongful dishonour can make the bank liable to its customer.
6 · In Sri Lankan business. Companies pay suppliers by 'account payee' cheques; 'refer to drawer' signals no funds.
7 · Close in one line. Crossings protect the payer; the refusal rules protect the bank and the customer.
Scoring tip: Quick sketches of each crossing earn marks and save words.
