LEGAL SENSE (Hint 2)
by ANSLAM C. AGIM, ESQ
NATURE OF THE RELATIONSHIP BETWEEN A BANK AND A CUSTOMER
Generally, the relationship of a bank customer and a banker is contractual. In other words, a customer to a bank in relation to the business of banking is any person having an account with a bank or for whom a bank has agreed to collect items and includes a bank carrying an account with another bank.
It is the duty of a bank to its customer to honour and pay cheques drawn on it by the customer as long as it has in its possession at the material time, sufficient and available funds for the purpose. Therefore, when there is sufficient and available funds in a customer’s account and a cheque is presented but payment is refused, the holder is entitled to treat the cheque as dishonoured even if requested to represent. See, the case of Union Bank of Nigeria Plc v. Chimaeze (2014) All FWLR (Pt. 734) page 48 @ pages 72 – 73, paras. H – C.
The Bank owes the Customer a duty to exercise a high standard of care in managing the Customer’s money. Therefore, if the Bank dishonours its Customer’s cheque when the customer’s account is in credit to accommodate the amount on the cheque, the Bank has breached the fiduciary relationship between them, to which the Customer is entitled to compensation by way of damages.