MT KENYA UNIVERSITY

SCHOOL OF LAW

BACHELOR OF LAWS (LLB)

DEPARTMENT OF PUBLIC LAW

COURSE OUTLINE

BANKING LAW AND NEGOTIABLE INSTRUMENTS

ACADEMIC YEAR. AUGUST- DECEMBER Trimester (2014)

LECTURER . SETH OJIENDA*

WEEK 1. INTRODUCTION TO THE LAW OF BANKING.

 Definition of terms
 Banking business
 Parties to the transaction

WEEK 2. BANKER-CUSTOMER RELATIONSHIP

 Definition of a customer/banker.
 Obligations of the customer

WEEK 3. THE NATURE OF THE BANKER- CUSTOMER RELATIONSHIP

 Foley’s case

WEEK 4. OBLIGATIONS OF PARTIES IN A BANKER- CUSTOMER RELATIONSHIP

 Duty of the bank to the customer

 Duty of confidentiality
 Duty to honor the customers mandate
 Duty to inform of any suspicious activity
 Duty to receive money on behalf of the customer
 Duty of care and skill
 Exceptions to the rule
 Duty of the customer towards the bank
 Duty to exercise care when drawing cheques
  Duty to pay bank charges and commissions
 Duty to allow bank to combine his accounts
 Duty to allow the bank to exercise the right of lien

WEEK 5. TERMINATION OF A BANKER – CUSTOMER CONTRACT

 By agreement
 By notice
 By death
 By insanity
 By bankrupcy

WEEK 6. THE ACCOUNT

 General conditions before, after opening a bank account

 Types of accounts
 The statement of account

WEEK 7. MISTAKES IN RESPECT TO CUSTOMERS ACCOUNTS.

 Mistakes in favor of the customer

 Mistakes to the detriment of the customer

WEEK 8. NATURE & ESSENTIALS OF A NEGOTIABLE INSTRUMENT

 Types of negotiable instruments

 Parties to a Bill of exchange,
 Characteristics of a bill of exchange
 Acceptance of a bill of exchange

WEEK 9. NEGOTIATION AND NEGOTIABILITY

 Endorsement on a bill of exchange and its significance

 When a bill of exchange may be declined
 Characteristics of a negotiable instrument

WEEK 10.RIGHTS AND LIABILITIES UNDER A BILL

 Effect of forgery on a bill of exchange

 Rights and powers conferred upon the holder of a bill of exchange
 Effect of dishonor upon a bill of exchange

WEEK 11. DISCHARGE OF A BILL

 Situations under which a bill may be deemed discharged

 Effects of loss of a bill of exchange on discharge
WEEK 12 & 13. CHEQUES AND PROMMISORY NOTES

 Bankers duty to honor payment of all cheques

 Exceptions to the rule
 Effect of dishonor on cheques
 Duties of the customer as pertaining cheques
 Promissory notes

WEEK 14. REVISION

PRESCRIBED READING.

Constitution/other statutory provisions

1. The constitution of Kenya, 2010

2. The banking act Cap 488 the laws of Kenya
3. The Central Bank of Kenya act Cap 491 the laws of Kenya
4. The bills of exchange act Cap 27 the laws of Kenya

Cases

Woods v Martins Bank (1959) 1 QB 55

United Dominion Trust v Kirkwood (1966) 1 AER 968

Re Shields Estates (1901) Irish reports 173

Commissioner of State Savings Bank of Victoria v Permewan Wright& co.

Commissioner of Taxation v English Scottish & Australian Bank (1920) AC 683

Great Western Railway Company ltd v London & County Banking Corporation

Stoney Santon Supplies (Coventry) ltd v Midland Bank ltd (1965)

Joiachimson v Swiss Bank Corporation

Foley v Hill (1848) v2. House of Lords 281, v9 ER 1002

R v Daven port (1954) vol 1 AER, 602

Tassel V Cooper (1850) CB 509

Forster v Bank of London

Hardy v Hearsy ( 1868) LR 3 Exchequer 107

Townier v National Provincial and Union Bank of England ltd

Libyan R. Foreign Bank v Bankers Trust co. (1988)

Nderitu v Standard Chartered Bank

Sutherland v Barclays Bank. Vol 5 legal decisions affecting bankers 163

Hannah Insurance Company of Israel v Mew (1993) vol 2 Lloyds reports 243

Barclays Bank v Okarnache (1962) vol2 Lloyds law reports 95

Braddfords Old Bank v Suttliffe 1918 vol2 KB 133

Gibbons v West minster Bank (1939) vol2, QB 882

Roggers v Whiteley (1892) AC 118

Curtis v London City & Midlands Bank ltd (1908) vol 1 KB 293

Tai Hing Cotton Mills v Lieu Chong Hing Bank ltd & others (1986) AC 80

Green wood v Martins Bank

Lipkin Gorman v Karpnale ltd (1989) vol 1 WLR 1340

Garnett v Mackewan ( 1872) LR 8 Exchequer division 10

Sky ring v Green wood (1825) 4B &C 281

Chatterton v. London County Bank (1891) TLR

Holland v Manchester & Liverpool District Banking co. (1909) vol 14 Commercial cases 241

British & North European Bank v Zalzein (1972) vol 2 KB 92

United Overseas Bank v Jiwani

Charton v London County Bank

Crouch v Credit Foncier of England

Caunt v Thompson (1849) 18 L JCP 125

Keene v Beard

Burnett v Westminster

*LLM(UoN), LL.B (Hons), Dip banking (KIB), Dip Law (KSL), Advocate of the High Court of Kenya.

NOTE

PLAGIARISM

Plagiarism is presenting someone else’s work as if it were your own whether you
mean it or not!