Question

1. After the initial sequencing change, West Bank provided its customers with a document titled "Miscellaneous Fees" in which a footnote stated, "Checks written on your account will be paid in order daily with the largest check paid first and the smallest check paid last." Was this adequate notice to the customers of the change? Explain.
2. How did the decisions of other courts in similar cases affect the rulings of the courts in this case?
3. Suppose that West Bank's "Deposit Account Agreement" had not included "an obligation to Depositor to exercise good faith and ordinary care in connection with each account." Would the result have been different? Discuss.

Answer 1

1.This is not an adequate notice because of the reasons mentioned below:

• Footnotes are in small print and generally ignored by customers.
• Such an important matter should have been properly classified and sequenced instead of covering under miscellaneous. Miscellaneous generally implies trivial or small non-important matters.
• The order of cheque payment has no direct connection with fees or bank charges.

2. Decisions (ratio decidendi) of other courts in similar matters (same facts) may be used as per doctrine of judicial precedent or stare decisis. This is also known as jurisprudence and equally important like explicit legislations, provided that there is no change in law or customs. In case of stare decisis, the lower court is bound to honor the ruling of the court higher in hierarchy, if other things are being same.

3. There is an inherent obligation on part of the bank to exercise good faith and reasonable care in connection with each account. Therefore the bank could not take a defence that such a clause is not mentioned in the agreement. The banks are duty bound to cover all such important caveats in the agreement which is in the overall interest of bank and its account holders.