Payment of a forged invoice

An invoice is often paid without assessing whether this invoice may have been forged. Does payment of an invoice to an account number specified by the fraudster discharge the debtor or can the creditor still claim payment from the debtor? The Supreme Court recently ruled on this issue.

The case involved the following.

After concluding a purchase agreement, a supplier sent an invoice to the customer by e-mail. A few minutes later, the customer received a second e-mail from the same e-mail address, stating that a mistake had been made and that a new, correct invoice would be sent. Then the customer received a third e-mail containing the new invoice. In this new invoice, a new account number was mentioned. These second and third e-mails were from the fraudster. A few days later, the customer paid the purchase price into the fraudster's bank account. The supplier, who had never received the purchase price, demanded payment of the invoice. The buyer took the position that it had paid liberally.

The court ruled in favour of the supplier. The Court of Appeal and the Supreme Court came to a different conclusion.

The Supreme Court judged the case on the basis of an earlier criterion given in 1992:
If someone, by falsely pretending to be someone else, declares something on behalf of that other person - in this case the designation of a bank account for payment - the basic principle is that that other person can rely on the fact that the declaration is not from him, even if the addressee has assumed and could reasonably assume that the declaration did come from that other person. This may be different under certain circumstances. These circumstances must be of such a nature that they justify attributing to the person for whom something has been falsely declared, all or part of the declaration, that the addressee took it to be genuine and could reasonably have taken it to be genuine.
The circumstances may therefore also be such that the person for whom the false declaration was made is only partly to blame for the fact that the addressee placed legitimate reliance on it, and that this remains for the addressee's account and risk.

The assessment referred to above may take into account, inter alia, the extent to which the parties have taken adequate precautions to prevent a third party from being able to impersonate one of them. In this connection, the parties can be expected to explain what efforts they have made to find out how the third party was able to falsely claim to be one of them and what the results of these efforts were.

The Supreme Court agreed with the Court of Appeal that in this case the buyer had paid liberally. The special circumstances in this case were such that the supplier could be blamed for the fact that the buyer had taken the e-mail with invoice for genuine and could also reasonably have taken it for genuine. This is because the forged e-mails that the buyer received were from the e-mail address that was also used to send invoices in previous orders. The subject of the forged and uncorrected emails was always the same and no fixed account number was used by the supplier (the designated bank and account number differed per order). In addition, it was not unusual for documents to be amended by the seller in the interim (because delivery details or order size were changed). In the past, the format of the invoices was not always the same, the (correct) invoice was only received by post after the payment deadline had expired and the buyer was only given notice weeks after the payment deadline had expired, making it impossible to reverse the payment.

The basic principle remains that an invoice remains due if it is paid to a fraudster unexpectedly. In view of the circumstances involved, however, this time the supplier drew the short straw. As a buyer, you should therefore check every payment carefully and sound the alarm if you have any doubts about the authenticity of an invoice.

Do you have any questions or would you like advice? Please feel free to contact one of our lawyers without any obligation. We will be happy to assist you.

SPEE advocaten & mediation Maastricht