What does contractual capacity mean?

���� Contractual Capacity: The minimum mental capacity required by law for a party who enters into a contractual agreement to be bound by it.

What is contractual relationship between banker and customer?

The general legal relationship of bank and customer is contractual relationship, started from the date of opening an account. [1] When customer deposits money into his bank account, the bank becomes a debtor of the customer. [3] The banker is not, in the general case, the custodian of money.

What is contractual relationship in banking?

INTRODUCTION. The banker-customer relationship is a contractual relationship based on a contract between the parties. 1. As a contractual. relationship, it is governed by contract law.

What are the different types of relationship a bank has with its customers?

The general relationship between a banker and customer is:

• Debtor and Creditor relationship. When a customer fills and signs the account opening form he/she enters into a contract with the bank.
• Trustee and Beneficiary relationship.
• Principal and Agent.
• Lesser and Lessee.
• Bailor and Bailee.
• Advisor and Client.

What is capacity of partners?

Capacity of parties refers to each party who is entering a contract. Each is required by law to have the mental and intellectual capacity to understand the terms of the contract and to make the decision to enter it. Capacity of parties is also known as legal capacity.

What is required for contractual capacity?

Contractual capacity is required for both parties entering into a contract. Specifically, both parties must be mentally capable in order for the contract to be legally binding. If either party doesn’t have the capacity, then the contract will not be enforceable.

What is the most important relationship between banker and customer?

As a customer must be an account holder, the basic relationship between banker and customer is that of DEBTOR AND CREDITOR, the banker being the debtor with regard to funds deposited with him, and being the creditor in respect of money lent by him.

What is the legal relationship between customer and banker when customer opens a savings bank account?

When a customer opens a bank account with the bank, he fills the form and other requisites compulsory for the same. When he deposits money in his bank account, he becomes a creditor to the bank. The bank becomes the debtor.

Which is the most important relationship between banker and customer?

When a bank lends money to its customers the relationship is?

Therefore, the general relationship between a depositor and the banker is a relation of the debtor and the creditor. The depositors are creditors and the bank is the debtor. However, the relationship between the banker and customer is directly opposite when the bank lends money to its customer.