Banking Law Case Study Example | Topics and Well Written Essays - 2500 words

Banking Law - Case Study ExampleThe exclusively point of the stop bill sticker is to make it wholly different with banks promising to pay irrespective the state of the customers account. The mortal who produces a hitch card makes no federal agency that he is in credit with his bank.All the trader is concerned to pray is whether the customer have a run down card, whether it matches the arrest, whether the cheque is for not more than the permissible credit influence and whether the signature tune on the cheque match the signature on the card.In the present case the appellant/ acc phthisisd opened a bank account with the National Westminister Bank. He was allowed an overdraft of 100 pounds of one month which was latter extended for a month. The conditions were printed on the back of the cheque.The issuing bank undertakes that any cheque not exceeding 30 pounds will be honor subject to the fact that the cheque must be signed in the presence of the payee, the signature on the cheque must correspond with the specimen signature on this card, the cheque must be drawn on a bank cheque run bearing the code number shown on his card, the cheque must be drawn before the departure date of his card, the card no. ... If these conditions are complied with the recipient need not concern himself about the boxers credit worthiness for he knows the cheque would be honored on presentment.A man who gives a cheque represents that it will be met on presentment. And if a cheque is accepted by the payee it is the belief that it will be met.And when it is supported by the banks undertaking and all doubts in the mind of the payee as to the cheque being honored will be removed if he sees that the stipulated conditions are complied with. But by issuing a cheque book and a cheque card the bank has not authorized him to bind them by the use of the card to honor every cheque in the cheque book. It was observed that by exhibiting to the payee a cheque card containing the undertaki ng by the bank to honor cheques drawn in compliance with the conditions endorsed on the back, and brief the cheque accordingly, the drawer represents to the payee that he has actual authority from the bank to make a contract with the payee on the banks behalf that it will honor the cheque on presentation for payment. Speaking on ostensible authority on its head it was observed that if the other party has believed the representation and on the faith of that belief has acted upon it and the person represent to be his principal has so conducted him self towards that other party as to be estopped from denying the truth of the representation , then and only then, is he bound by the contract purportedly made on his behalf. The whole foundation of liability under the doctrine of ostensible authority is a representation , believed by the person to whom it is made, that the person claiming to contract as agent for a principal has the