A. Introduction

• Author: M.H. Ogilvie
• Profession: LSM, B.A., LL.B., M.A., D.Phil., D.D., F.R.S.C. Of the Bars of Ontario and Nova Scotia Chancellor's Professor and Professor of Law, Carleton University
• Pages: 175-176

Page 175

The legal relationship of bank and customer comes into being when a customer opens a bank account, that is, enters a legally binding contract with a bank. The account agreement is typically only the starting point, however, for a long-term relationship during which the bank will provide various services for the customer either encompassed by the account agreement or subject to additional contracts for those specific services, such as loans, safety deposit boxes, mortgages, foreign exchange transactions, or credit cards. Thus, there are really many relationships in law between a single customer and a bank regulated by the many contracts into which they might enter during the duration of their dealings with one another. In addition, and in common with other relationships based on contract, tortious and fiduciary obligations might also be implied into the relationship from time to time, such as when a bank is performing any contractual service for the customer, giving advice to the customer, or giving a reference to a third party in relation to the customer. The bank and customer relationship is multifaceted in law and in practice.

Until the late twentieth century, the contract opening a bank account was found as much in the common law as on paper. Historically, account agreements were simple and understood against the common law background of numerous implied terms. However, the account

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agreement is now a relatively sophisticated and lengthy standard form contract, in contrast to the earlier contracts consisting of eight or nine short terms...