How should a lay person respond if they see a monk teaching something contrary to Dhamma?
The word sangha is used nowadays to refer to the bhikkhus. This may or may not be true. One does not have to be a bhikkhu to belong to the sangha. An Upāsaka (male) or Upāsikā (female) - lay followers – could also be part of Arya Sangha. Upāsaka and Upāsikā are part of Ariya Sangha, once in the Path. The Ariya Sangha is described as all those who have attained at least the stage of Stream Entrant. 

A bhikkhu is someone who has renounced the life of a layman to dedicate himself exclusively to practice, realization, study and teaching of the dhamma. But in the present day and age, there are a great number of bhikkus who have not come to the stage of Stream Entrant. Thus they are not part of Arya Sangha.

There were times when Hattha Āḷavaka Ugga gahapati (householder) preached dhamma to the Bhikkus at the time of Buddha, when no one else came forward to speak on Dhamma.. 

The Buddha does not advocate superficial unity for its own sake between bhikkhus or amongst bhikkhus and lay followers at the expense of the Dhamma. Buddha instead encourages that the Dhamma be clearly defended against non-Dhamma and that the distinction between the two be kept clear.

Buddha has described in no less than six suttas about what one should do at such an instant. In the Sangha Bedha Sutta (AN 10.1.4.7), Buddha’s instruction is to not advocate superficial unity for its own sake at the expense of the Dhamma, but instead encourages that the Dhamma be clearly defended against non-Dhamma and that the distinction between the two be kept clear. According to the Vinaya, a speaker of non-Dhamma is to be recognized as such if he “explains not-Dhamma as ‘Dhamma’ … Dhamma as ‘not-Dhamma’ … not-Vinaya as ‘Vinaya’ … Vinaya as ‘not-Vinaya’ …

Thus the ability to take a stand requires that one be well-informed about the Buddha’s teachings. A difference of opinion can be rightfully ended only if both sides are able to investigate the grounds and get to the root, and then resolve which side was right, based on the Dhamma and Vinaya.



For more about the Sangha Bedha Sutta, see the Suttas on pages 1389 through 1391 which are titled Schism(1), Schism(2), and Ananda(1) in The Numerical Discourses of the Buddha: A Complete Translation of the Anguttara Nikaya – by Bhikkhu Bodhi; and Schism in the Sangha by Thanissaro Bhikkhu &amp; Geshe Rabten
.