There is no privity of contract between the payee/customer of a remitting bank and the collecting bank arising from the processing of a cheque. Wright J said: ‘To create privity it must be established not only that the principal contemplated that a sub-agent would perform part of the contract, but also that the principal authorised the agent to create privity of contract between the principal and the sub-agent, which is a very different matter requiring precise proof.’
Wright J
(1931) 36 Com Cas 71
England and Wales
Cited by:
Cited – Grosvenor Casinos Ltd v National Bank of Abu Dhabi ComC 17-Mar-2008
Banker’s reference no guarantee
An Arab businessman lost pounds 18m at the claimant casino, and wrote scrip cheques against his account with the defendant. The claimant obtained judgment, but being unable to enforce that judgment pursued his bank. The club had used a system where . .
Lists of cited by and citing cases may be incomplete.
Updated: 07 August 2021; Ref: scu.268095