Bank ignored instructions by allowing early cashing of cheque

Clearing cheques,
Hamish hired a contractor to do work on his property. He gave the contractor a post-dated cheque for $500. Hamish’s bank allowed the contractor to cash the cheque before the specified date. When the contractor failed to complete the work, Hamish complained to his bank that it shouldn't have honoured the cheque before the specified date. The bank offered to reimburse the $500, but he declined the offer and complained to us.
January 2016

Our investigation

We considered that the date on the cheque amounted to an instruction to Hamish’s bank to pay the funds on or after that date. By paying early, the bank had not followed Hamish’s instructions. We considered that Hamish’s loss amounted to the value of the cheque only, although the bank increased its offer to $1,000 in recognition of the stress and inconvenience he had suffered. 


Hamish accepted the offer.

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