1. One of the questions most frequently submitted to the Questions and Answers Department is as to whether a particular document in the form of a cheque, but which contains some variation, either by way of omission or addition, of the ordinary cheque form, should be regarded as a cheque and either negotiated or paid.

Sir John Paget, in one of his lectures in London before members of the Institute of Bankers, in discussing the London Joint Stock Bank v. Macmillan Case (see Volume 25 of the Journal (1918), page 313), called attention to what Lord Haldane, one of the Law Lords, said in the Macmillan Case in regard to these so-called cheques.

Lord Haldane said: "The customer contracts reciprocally that in drawing his cheques he will draw them in such a form as will enable the banker to fulfil his obligations, and therefore in a form which is clear and free from ambiguity."

Sir John Paget's comment on this language will be of comfort to perplexed bank officers. He goes on to say:

"Let me diverge here for a moment to draw your attention to the bearing of these words on another important point. I have often, both here and elsewhere, given it as my opinion that a banker is not bound to pay any cheque which is irregular or ambiguous in form, unless he has expressly or impliedly undertaken to do so. When specimens of abnormal, perplexing forms of cheques have been submitted to me, and I have been asked what the banker should do, I have said you are not bound to take any risks. It is part of the bargain that the customer should draw his cheques properly and if he does not keep his part, you are not bound to keep yours, and I should return them with a harmless answer, such as 'Cheque irregular, requires confirmation.'

"I do not know that up to now I have had any direct authority to support this view, and I am, therefore, glad to have it confirmed by Lord Haldane, who, in another part of his judgment, repeats the statement in somewhat different terms: 'For as I observed before,' he says, 'the banker, as a mandatory, has a right to insist on having his mandate in a form which does not leave room for misgiving as to what he is called upon to do' Lord Shaw lays down much the same rule with regard to a cheque which suggests having been tampered with.

"I would note, in passing, that two of the learned Law Lords suggest that in such circumstances the banker's answer should be 'Refer to drawer.'"