Commercial Law Lecture Notes PDF

Commercial Law Dr. yara El Gendy  Chapter One Money Deposit  The money deposit is a very important source of money to the bank. According to this source the bank can do his work of lending money and invest money in deferent kinds of work in the economy of the state. It can finance the differe...

Commercial Law Dr. yara El Gendy  Chapter One Money Deposit  The money deposit is a very important source of money to the bank. According to this source the bank can do his work of lending money and invest money in deferent kinds of work in the economy of the state. It can finance the different sort of enterprises to be able to produce either product or service. Therefore, the legislator starts the provisions of banking operations by organizing this work. This work occupies nine articles in the trade law (articles 301-309). We will deal with this subject as the following:  Section one: Definition and elements of money deposit contract.  Section two: The effects of the money deposit contract  Section One Definition and elements of The Money Deposit Contract  Definition of the money deposit: The legislator in the Trade Law provides in article 801 on the definition of the money deposit. It provides that “The money deposit is a contract authorizes the bank the property of the deposited money and disposing according to its activities under obligation to return similar money to the depositor according to the conditions of the contract”.  From the words of this article we can notice that the legislator translates its view to the money deposit operation. That is the money deposit as an one of the banking operations in fact it is not only a physical work but also it is a legal act. The source of this act is the contract of money deposit.  For that we find the legislator says that the money deposit is a contract. That means the deposit of money at the bank is a legal act represented in the contract. Then, all the elements and conditions of the contract theory must be existed in this act.  We can say that money deposit is a contract between the customer and the bank whereby the customer can deposit at the bank a sum of money for a rate of return paid to the customer. The bank agrees in return to make the same number of money available to the customers any time they wish. The depositor enters into a written agreement with the bank that no part of the sum will be withdrawn prior to the maturity date.  Some jurists go to say that most people suppose that a bank lends the deposits of its customers. In fact the word deposits is used in two entirely different inconsistent way, that the word deposit means; deposit as a physical asset deposit as sums of money owed by the bank to depositors, the former is an asset, the second is a liability of the bank which means that the bank is in debit not is an owner of the money deposited to it.  Elements of the contract: From the language of the article 301 of the Trade law we notice that the legislator qualifies the money deposit sit that it is a contract between a depositary bank and the depositor customer. Therefore, we will discuss the general elements and the specific elements of the contract.  General elements of the contract:  The particular elements: General elements of the contract:  The general elements of the contract of money deposit are the consent, object and consideration. a- The consent of the parties: The voluntaries of the parties must intend to conclude the deposit contract and agreed on its effects. So the contract will not be concluded if the voluntary of each party to the contract does not go to the same contract.  the article 89 of the civil code enacts that the contract has been concluded- on the time the two parties exchange the corresponding voluntaries. If the conditions offered from the bank, are not all the conditions of the contract but only the substantial conditions, that does not effect on the existence of the contract. If the two parties, the bank and the customer, agree on that the customer receives rate of return in a definite percentage, this percentage will be an essential elements of the contract. This percentage is available to increase for the interests of the customer but not available to decrease. *If the bank goes to decrease the rate of return agreed on, it must notify the customer the new rate, if the customer refuses, the contract will be repudiated, if he accepts, the contract will be in force and if the customer does not reply, that means he accepts the new rate of return. If the bank conditioned in the contract that the rate of return as changeable, the customer cannot claim the repudiation of the contract. May the bank directs to stop paying the sum of rate of return mentioned in the contract on the base that the value is changeable. The agreement on that the value is changeable does not mean that the bank does not discharge his obligation of payment. The change of the value means that it may increase or decrease but that does not mean that the bank does not perform his obligation of paying the sum to the customer, in the case of the customer returns to the court to repudiate the? Contract, the court judges to the benefit of the customer it judges the return of deposited money to the customer and a compensation equal to the real value of the rate not declared one. The bank cannot plea the ratification because of accepting the rate in the low value. That due to the receiving of the low value by the customer does not mean his ratifying. There is very important condition in the subject of ratification which is non-objecting on this low value. The consideration is the value of the rate on the time of conclusion the contract even the two parties do not mentioned it in the contract. we can say that if the consent of any party to the contract of deposit has been defected by any vice of consent the contract will be null.   b-The object:  The object in the general rules must be existed or existable, distinguish or distinguishable and legal. If the field of money deposit contract of object always money either on surrending the money to bank or transferring them to bank, so the money must be existed on the time of the operation of deposit or transferring.  The money must be distinguished, which means the amount must be defined in number, when the depositor enteris into a written agreement with the bank the two parties know that the money may not existed on the time of concluding the contract so the depositor can deliver the money any time during the period of contract, usually there is no restriction on the customer as to the sum of money of the time of delivery. *As to the place of delivery the money, the customer can pay at the branch of the bank contracted with him or any other branch of the bank. It is not necessary to deposit or withdraw through the same contracted branch. *It is not important as to the bank the source of money deposited by the customer because the essence of the operation is the physical transfer of the money from customer to the bank.  C- The consideration;  The consideration means the reason of the contract. It is supposed that the reason is legal. If the reason of contract is illegal which means against the public order and the public moral then the contract will be null.  There is a difference must be noticed between the deposit of the sum to use in illegal acts, and the deposit of the sum to the bank to use it or is revenues in illegal acts against the public or moral order. In the first device it is not the affair of the bank to control the customer in his using the money of his account because the purpose which means the consideration is keep the money and the customer uses it as he which without any control revision from the bank. But, in second case, where the agreement between the customer and the bank will be on using the money in illegal purpose then the contract will be null.  The particular elements This contract belong to the parties and the object. This contract is between the customer and the bank. The object of this contract is the money. So, we will analyze each element.  a-The customer:  Deposits are the most important money to the bank, it is a result of a legal act between the customer and the bank, this act called money deposit contract. If it is clear that the person who creates his contract is the customer because he seeks to make the contract with the bank. The legislator does not put a definition to the customer.  we can define customer that the person who contracts with the bank to pass the bank his money to keep and safe the money till the time of maturity which is the time of take back the money from the bank. So, the customer is the person who has the right to deposit money at the bank and withdraw the money from the bank according to the regulation of the bank. The relationship of banker and customer does not come into existence unless both parties intend to enter into it. There must be a deposit account to make a person a customer of a banker. Therefore, the relationship of banker and customer existed as from the date when the bank accepted the deposit of the customer. *If the person has no account with a bank he will not be a customer. A person becomes a customer immediately the opens an account. He does not need to have habitual dealings with a banker to consider him as a customer. * a condition which determines the status of a person as a customer is the nature of his dealings with the banker. The dealings between a banker and a customer must be related to the business of banking.  b-The depositary must be a bank:  The legislator does not define a bank in Trade Law. When the legislator defin71the money deposit it defines it as a contract between the depositor and the depositary bank. A trend in jurist goes to say that the meaning of bank or bankers should be interpreted as every person, firm or company accepting deposits of money subject to withdrawal by cheque, draft or order. Some legislations define a banking company as “the acceptance, for the purpose of lending or investment, of deposits of money from the public repayable on demand or otherwise, and withdrawal by cheque, draft, order or otherwise.