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COMMERCIAL LAW II10/04/2016

BANKING

1) at common law position if you aint got account, you aint no customer
Ladbroke co v Todd, great western rly v London & country bank
2) new position- if bank provides financial services, even without need for account
= customer , ducare arises in respect of that service. [woods v martins bank]
3) customer in gh = anyone receiving 11 love from bank

Formation Of Banker-Customer Relationship


a. Customer offers to deal with bank.
b. Basic relationship between bank and customers = contractual. All
elements of contract apply.
c. If customer deposits = customer = creditor, bank = debtor.
d. If q of credit bank = creditor, customer= debtor [ foley v hill]
e. When bank collects cheques for customer & other ancillary services eg buy
shares for em= Principal/agent
f. If bank in custody of customers, valuables = bailor/bailee

Rights & Duties Of Banks


Ligget Liverpool ltd v Barclays bank.
DUTIES
1st duty- follow customers mandate exactly- ligget v Barclays bank, Joachimsom v
swiss bank
2nd- honour cheques properly drawn
- if customer has credit balance or overdraft
-if cheque = prima facie regular
- comes to banker in ordinary course of business
a banker who wrongfully dishonours a cheque is liabile to customer in
damages.
3rd- keep customer info and transaction confidential- tournier v national provicial
& union bank, 4, act 673/738, 17 borrowers n lenders act
-except i. when disclosure is required by law

ii. with consent of customer- 84- BoG act


4th to collect cheques on behalf of customer
5th provide regular statements to customer-Tai hing cotton ltd v liu chong bank,
Barclays bank v dabo
6th give reasonable notice to customer before closing credit account.. reasonable =
q of fact.

RIGHTS
1. To charge reasonable commission on transactions
2. to exercise a lien where the bank collects cheques into overdrawn account
3. to use customers money
4. right to expect due care was taken in writing cheques and to be informed of
forgeries

DUTIES OF CUSTOMER
1. To inform bank of all fraud n forgery on account- greenwood v martins bank.
2. to ensure that instruments of withdrawal arent easily alterable London J.S.
Bank v macmillan & Arthur, 1932 1 KB 544 CA

TERMINATION OF THE RELATIONSHIP


per contract- eg. 90 day t-bill.
Per customers instructions
Death of customer
Insolvency of customer
Liquidation of bank

LENDING & BORROWING 1O1


1. regulated by borrowers and lenders act 2008, act 773

2. applies to i. credit agreements between parties dealing at arms length in sums


over ghc 100 or more. Ii. Credit guarantee where guarantee is only for credit facility
or other act covered transaction. And made in or to having effect in gh- 1
3. if borrower = body n lender = shareholder of body, arms length, if parties
ebusua, other legal non arms length [eg inter affliate borrowing]- 4

Borrowers rights- 13-19


1. right to apply for credit- if contractually capable. But no right that particular
lender shall lend. 13
2. no discrimination on grounds of race, gender, etc etc. eitha in giving credit or
deciding terms- 14.
3. if doc to be delivered by lender to borrower do it in person, by mail, email, fax,
or other means previously agreed on.
4. lender cant show borrower for exercising statutory right by penalizing him
proposing to/alter agreement, accelerate, enforce, suspend or terminate that credit
agreement or another with another creditor. 16
5. nor lender nor his agent can disclose borrowers info except required by law-17.
6. lender must give pre-agreement statement which shall contain :
i. principal amount
ii. proposed disbursement schedule of principal debt
iii. interest rate
iv. other credit costs
v. total amount involved in agreement
vi. proposed repayment schedule
vii. basis for assessing costs caused by borrowers breach
- borrower may sue lender in breach for loss suffered from breach.
7. agreement can regulate but cant prohibit early settlement.- 20.
-amount required for early settlement; unless otherwise agreed =
a. principal amount
b. accrued interest charges
c. early settlement fee as agreed
d. all other charges payable up to date of settlement.
- 20

Remedies of the Lender 32


1. upon default, must write to notify and request settlement.
Within 30 days.
2. Letter to be delivered by hand, courier, registered mail or
other agreed method.
3. If by hand 30 days starts on receipt. If other, on date
recorded as delivered by return receipt.
if borrower still dont pay, lender can sue on any covenant to perform, or realise
security- 33
lender doesnt need court order to possess on default. If borrower wont leave
peaceably, ge the popo- 34

collateral registry 21-26


1. = register of all securities.
2. Registration to be done by or at instance of borrowe within 28 days of
creation.
3. Failure to register makes security ineffective and money so secured shall
become immediately payable notwithstanding any provision in contract to
contrary.
4. Registration details: names of parties, nature of charge, amount secured by
charge, date of creation, short details of property charged., limitations if floating
of borrowers power to grant further charges.

Interest Rates
1. principle= lender having been deprived the use of his money ought to be
compensated- ibm v hasnem, riches v Westminster bank.
2. not automatic. Only arises if by trade usage or dealings of the parties a contract
for interest is impliable.- shaw v pictor
3. not exigible on money lent for social purposes/contextn
4. compound interest can only be charged if borrower acquiesced - GCB v v odom
5. interest due date of judgment or date of final payment? 2007scglr 602

BILLS OF EXCHANGE
Features:
1. see exchange act 1961 [act 55]
2. = an unconditional order in writing addressed and signed by 1 party requiring
the addressee to pay on demand the sum thereon specified to a named
person/bearer.
3. Drawer- signatory of bill
4. Drawee- addressee of bill
5. Drawee must accept to honour bill
6. Acceptance = assent of drawee+ delivery/notification of assent
7. Payee- bearer/named party to receive the money.
8. Negotiation is?
9. 29[2]

features of a BoE
1. unconditional order- must be an imperative command to pay up not hinged to
any conditions precedent. Nor is it request like cheque is.
2. Jst see ac
3.