1. (b) Highlight five instances when a legal bar exists as to payment of a customer's cheque. (10 marks)

Certainly! Here are five instances when a legal bar exists as to the payment of a customer's cheque:<br /><br />1. **Bankruptcy or Insolvency**: If the customer is declared bankrupt or insolvent, the bank may place a legal hold on the cheque, preventing it from being honored to protect the customer's creditors.<br /><br />2. **Fraud or Forgery**: If the cheque is suspected to be fraudulent or forged, the bank may refuse to honor it to protect itself and the customer from potential financial loss.<br /><br />3. **Post-Dated Cheques**: If the cheque is post-dated and the date has not yet been reached, the bank will not honor it until the specified date, effectively creating a legal bar to payment until then.<br /><br />4. **Stop Payment Orders**: If the customer or the bank issues a stop-payment order on the cheque, the bank will not process it, effectively creating a legal bar to payment.<br /><br />5. **Legal Holds or Freezes**: In situations where a legal dispute arises, a court may issue an order to freeze or hold the customer's assets, including any cheques, preventing them from being used until the dispute is resolved.<br /><br />These instances represent situations where legal or regulatory frameworks prevent the payment of a customer's cheque to protect the interests of the customer, the bank, or other parties involved.