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Legal blog > Company > The bank and the good financial health of a client

The bank and the good financial health of a client

When a bank agrees to transmit information, it must behave in a reasonable manner.

«We often regret speaking, never staying silent»
Plutarque

In business, it is customary, when signing an important contract with a supplier, to inquire about their financial health.

Thus, a company, about to issue a check for over one and a half million dollars to a construction company, contacts the latter's banker to confirm its financial soundness. After receiving a positive response from the bank, the company issues the check. Seven days later, the construction company voluntarily declares bankruptcy. The company is therefore obliged to complete the work and settle the liens registered on its property.

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The company turns to the Court and requests that the construction company's bank reimburses them for the damages suffered. According to the court, the bank had no legal obligation to provide the requested information. However, once it "agreed to transmit the information, it must behave reasonably". Under the guise of a disclaimer, the bank could not claim that the construction company was financially healthy when it knew, or was in a position to know, about its precarious financial situation.

In these circumstances, the bank's behavior constitutes gross negligence. The Court therefore orders it to compensate the damages suffered by the company.

Exaggeration, criticism, information manipulation, and silence are useful weapons in communication. It is up to the communicator to master them if they do not want to be mastered themselves.

* CA 500-09-010667-012, 2005-03-29

François Forget, notary and legal advisor, along with the entire team at ScriptaLegal, are here to assist you with the preparation of your legal documents and to answer all your legal questions.
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