Court of Cassation Ruling on Bank Liability for Counter-Crediting Unpaid Check

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Court of Cassation Ruling on Bank Liability for Counter-Crediting Unpaid Check

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Bank check, cheque counterparty, opposition, non-liability, bank liability, CMF article L131-35, reimbursement right, bank client, check law, presenting bank, drawn bank, counter-credit, check payment, bank responsibility, check opposition regularity, advance on collection, check jurisprudence, court of cassation, commercial chamber, bank check law, banking regulations, financial institutions, check payment opposition, banking law, banking jurisprudence, bank-client relations, financial regulations, banking sector, check transactions, banking obligations, banking rights, court decision, jurisprudential line, banking practices, check handling, banking legislation, financial legislation, banking checks, banking disputes, check counterparty opposition, banking law article, financial law, banking sector regulations, banking checks jurisprudence, check payment procedures, banking institution liability, check law usage, banking practices check law, check opposition procedures, banking client rights, banking institution rights, check transactions law, banking law court, banking jurisprudence check opposition, check law banking regulations, banking checks court decision, check law jurisprudence, banking law check payment, check opposition banking law, banking regulations check law, check law financial institutions, banking law check opposition, check jurisprudence banking law.

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Abstract
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Abstract

The Commercial Chamber of the Court of Cassation upheld a decision that a bank is not liable for counter-crediting a check returned unpaid due to opposition, as it is not required to verify the regularity of the opposition.

Extract

[...] If the commercial chamber of the Court of Cassation bases its decision under the letter of article L.131-35 of the CMFA), it completes its light control of the appeal judgment by recalling the bank's right to reimbursement with regard to its clientB). The recall of the bank's right to reimbursement with regard to its client In recalling the bank's right to reimbursement with regard to its clientB), the Commercial Chamber of the Court of Cassation reverses a trend towards which the consumer has the unfortunate habit of thinking that the bank only has obligations and no rights. [...]

[...] Such an act can even have the effect, if the clients do not have the necessary funds to repay the loan in support of the absence of provision, of creating a phenomenon of chain bankruptcy. Professor Jérôme LASSERRE CAPDEVILLE, highlights the tendency of judges to remind the client that it is first his imprudence that is the origin of his prejudice, and not the bank, which can be quite harsh for the client, who often thinks that if the banker performs the operation it is because it does not present any risk, the client certainly trusts the bank, which according to him would not act if the slightest risk could be outlined in the future. [...]

[...] By rejecting the appeal, on the occasion of a light review, the commercial chamber of the Court of Cassation upheld the decision of the appeal court not to have carried out the search requested by the spouses, which was inoperative from the outset because the presenting bank was not required to verify the regularity of the opposition to the payment of the check made by the drawer at the drawn bank. Although it is a decision of a specific case, the latter is part of a well-established jurisprudential line on the occasion of which the commercial chamber of the Court of Cassation has sanctified the principle that: the bank that credits the account of the beneficiary of a bank check, then counter-credits the same amount returned unpaid due to the opposition formed against this check does not incur liability. [...]

[...] Cassation Court, Commercial Chamber, July No. 17-13.579 - Does the bank that credits the account of the beneficiary of a bank cheque, then counter-credits the same amount returned unpaid due to the opposition filed against this cheque, engage its liability? It is common that the Court of Cassation is cited for its most just office: namely its its reparative nature and its will to protect the weaker party. Such is the case in the context of its banking jurisprudence where many rules of consumer law are mobilized in order to sacralize the fundamental protection of the consumer, namely the client of a credit institution. [...]

[...] Advance on collection - a problematic usage in check law While the Court of Cassation has been able to rule in favor of the bank so far, it would be lacunaire not to highlight the problematic usage of advance on payment in check lawB). If the commercial chamber grants the appeal judgment to have made «the advance of the check amount (?) », It is because the check law is governed by a fundamental principle under which the check is 'payable on sight', in accordance with Article L.131-31 of the CMF, as recalled by Professor Jérôme LASSERRE CAPDEVILLE, therefore, from its issuance, the check can be presented for payment, since the client mandates the bank to this effect, it is for this reason that traditionally, banks have the habit of recording as soon as they receive a check the amount of the latter to the credit of their client's account. [...]

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