LEGAL PRINCIPLE: CONTRACT LAW — Breach of Contract — Damages — Claim for Recompense for Value of Money Not Remitted
PRINCIPLE STATEMENT
To establish a breach of contract for failure to remit funds, the plaintiff does not need to allege and prove a contract with a third party; the basis is the contract with the bank.
RATIO DECIDENDI (SOURCE)
Per Ayoola, JSC, in Onwuchekwa v. Nigeria Deposit Insurance Corporation (2002) NLC-982000(SC) at pp. 8–9; Paras E–A.
"Whether the appellant's claim is regarded as a claim in contract or one in negligence, it is clear that the basis of his claim was the contract he had with the bank for the remittance of funds to his suppliers overseas. To establish a breach of that contract or negligence in its performance he did not need to allege and prove that he entered into a contract with a third party."
EXPLANATION / SCOPE
A claim against a bank for failure to remit funds is based on the contract between the customer and the bank. The plaintiff need not prove a separate contract with a third party (e.g., a supplier). The bank’s duty arises from its contract with the customer. The principle simplifies the proof required. The plaintiff must prove the contract with the bank and the breach. The underlying transaction with the third party is relevant to damages but not to liability. The rule applies to claims in both contract and negligence. The court will not require unnecessary proof. The principle promotes access to justice.