BANKING LAW ā Banker-Customer Relationship ā Effect of Breach of Joint Mandate
Principle Statement
Where a joint mandate requires both partners' signatures for withdrawals, the bank owes each partner the duty not to allow either to withdraw funds without the concurrence of the other, signified by the signature of that other as stated in the mandate.
Ratio Decidendi (Source)
Per Oguntade, JSC, in Ndoma-Egba v. African Continental Bank Plc (2005) NLC-402001(SC) at p. 25; Paras CāD.
"When the plaintiff and P.W.2 jointly executed the mandate form exhibit 1, it must have dawned on the defendant that each wanted to protect himself from a situation where the other could unilaterally withdraw the partnership funds. The defendant therefore owed each of the two partners the duty not to allow either of them to draw funds from the partnership account without the concurrence of the other, which concurrence must be signified by the signature of that other as stated in exhibit 1."
Explanation / Scope
A joint mandate creates a duty on the bank to require all designated signatures. Payment without all required signatures breaches that duty. The principle applies to banking law and partnership accounts. The rule protects partners from unilateral withdrawals. The bank cannot rely on one partner’s signature alone. The bank bears liability for honouring cheques not conforming to the joint mandate.
