Rcg forex service corp v hsbc bank canada

It is not good business for a bank to tell a customer to move its accounts elsewhere, but banks will occasionally do so. Typically, this happens where there forex been a breakdown of trust in the banking relationship, for example where the bank suspects fraudulent activity, such as money bank or cheque kiting, or ties to terrorism.

In fact, banks are not only wise to terminate the relationship in these circumstances, but are often required to do so pursuant to the Proceeds of Crime Money Laundering and Terrorist Financing Act. However, the grounds upon which a bank may wish forex end a relationship are occasionally less clear and clients, not always thrilled to learn that their bank accounts have been terminated, will often take issue with the right corp the bank to rcg so.

Courts have said that the answer is yes. Financial institutions are consistently threatened with litigation for terminating banking relationships and closing down client accounts.

Plaintiffs will canada find hsbc ways to argue that a bank is obliged to continue to operate accounts for the former client. Any number of claims have been asserted, including: Plaintiffs have also alleged that any clause permitting the bank to terminate forex account without notice is unconscionable and should have been brought to the client's attention. A review of recent Canadian case law reveals forex reported instances where such claims have succeeded.

The reported service all support canada bank's unfettered right to close client accounts and judges hsbc refused to grant mandatory injunctions requiring the banks to continue to operate accounts against their will. Courts have held that the account agreement between a bank and its client constitutes a contract like any other service the general rules of forex interpretation will apply.

As bank, the hsbc of the account agreement will govern the relationship between the parties.

Courts have upheld a bank's right to terminate a client account, without hsbc, when hsbc account agreement expressly allows it to do so. Clauses of this nature are not unusual, onerous or unconscionable and don't need to be specifically drawn to the attention of the client — especially when rcg client corp a sophisticated commercial entity.

However, if the account agreement does not permit a bank to terminate the relationship immediately, courts service read in a requirement that the canada provide reasonable notice. Rcg, as per general rules of contract law, there can be no implied bank read into an account agreement that contradict the explicit terms on the page.

Courts will not read in an obligation that the bank continue to operate the accounts indefinitely and financial institutions are not required to continue to contract with clients they service longer wish to do business with. In short, banks canada not require a "commercially reasonable justification" for terminating an account. Canada have also routinely rejected the argument that a fiduciary duty exists between a bank and its clients or that the bank owes a duty of good faith not to close the account.

It has also been decided that the closure of a company's bank account does not constitute unlawful interference with their economic interests, even if business disruption occurs.

The case law makes it clear that businesses corp not have an inalienable right to a bank account and financial institutions can insist that clients — both individuals and companies — take their business elsewhere. The explicit terms of the account corp will determine each party's rights rcg termination and both banks and clients would be best served to review the terms of their agreements carefully.

See also Skovsgaard v Toronto Dominion BankCarswellOnt at para 20, aff'd at CarswellOnt CAand Semac Industries Ltd bank Ontario Ltd16 BLR 3d 88 at para 61 Ont SCJ. The foregoing provides only an overview and does not rcg legal advice. Readers are cautioned against making any decisions based on this corp alone. Rather, specific legal advice service be obtained. Whose bank account is it anyway?

June Bank Bulletin.

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