Have You Ever Encountered A Bank Agreement That Absolves Bank Of "Negligent Performance"?

rockies | Dec 5, 2023 | 295 posts since 2018

The bank term reads "Bank shall not be responsible for consequential or incidental damages for negligent performance by bank of its services."

I have never encountered a term in a deposit agreement that explicitly states that the bank "shall not be responsible" for negligent performance. Have any of you seen such an explicit term? How have you dealt with it?

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Answers

alan1 | Dec 5, 2023 | 876 posts since 2015

This is an extremely common clause, especially in agreements relating to electronic funds transfers.

CuriousDave | Dec 5, 2023 | 233 posts since 2018

To what extent can banks in the U.S. legally avoid claims for negligence? Liability for professional negligence cannot be avoided in most of the regulated professions but can banking be considered a “profession?” Is there a special legal carve-out that protects banks?

rockies | Dec 5, 2023 | 295 posts since 2018

@alan1
Not sure why I would absolve any service provider of "negligent performance"....but perhaps I am missing something. Do you happen to have a pointer to a discussion...or an article... on this topic for banks that deals with what situations this is intended to address...and which situations would not be addressed? For example, in this case, it seems to be a blanket term....not related specifically to electronic funds transfer. TIA

alan1 | Dec 6, 2023 | 876 posts since 2015

rockies -- you wrote "Not sure why I would absolve any service provider of "negligent performance".

I would guess that you would do so because you wish to avail yourself of the service.

You have often posted here, and regularly use depositaccounts.com.
You do this even though this website's "Disclaimers and Disclosures" state:

To the fullest extent permitted by law, in no event shall Deposits Online, LLC or any of its directors, employees or agents have any liability whatsoever to any person for any direct or indirect loss, liability, cost, claim, expense or damage of any kind, whether in contract or in tort, including negligence, or otherwise, arising out of or related to the use of all or part of this Website, even if Deposits Online, LLC has been advised of the possibility of the same.
(emphasis added)
https://www.depositaccounts.com/pages/disclaimer.html

I wish to avail myself of the services provided by depositaccounts.com. I do so with full knowledge of the site's "Disclaimers and Disclosures" document. I don't lose any sleep over it.

Please note that the depositaccounts.com clause absolves the corporation from "any liability", limited only by the phrase "To the fullest extent permitted by law".

This is far more onerous than the bank agreement you quoted, which merely states that the bank is not "responsible for consequential or incidental damages for negligent performance by bank of its services", but does not otherwise appear to limit recovery of damages for negligent performance.
(italics added)

rockies | Dec 9, 2023 | 295 posts since 2018

@alan1
First, I apologize for my delay here. Thank you so much for this perspective. I am embarrassed to say that I had no idea that "negligence" was part of the DA terms. And, I appreciate your emphasis on the limitations of "consequential or incidental damages". If I decided to move forward with this bank, I would probably need to get a quick legal take on whether any of the more comprehensive bank terms would "limit recovery of damages for negligent performance" , since the original wording in question does not appear to (as you point out.) I really do appreciate the detailed response.

Ally6770 | Dec 9, 2023 | 4,290 posts since 2010

I read somewhere on this site to make sure that you check with the institution for the rates. I just spent 30 minutes in a credit union this morning trying to get a match for a CD and some other benefits that I could get that other credit unions have that I read about on this site. I called the first institution to verify the rate posted and checked with the other credit unions to make sure they still offer those benefits, then called the credit union I want to transfer my last traditional IRA to and make sure if they would match it. I will know Monday morning and asked about the added benefits I wanted.
I check out everything I do and what others do for me. I even check out the price the scanners that the stores ring up. Maybe because I worked in a grocery store at 13 through graduation from high school it made me aware that in those days the people at the registers didn't divide correctly on things on sale when you purchased just one of them. By doing this during October with the Michigan laws I was able to get a pair of Sketchers for $6.37 because the scanner rang them up wrong. I have also gotten 2 winter coats for $1 a free electric toothbrush for the scanners ringing things up wrong.
I even checked at the Register of Deeds after a Lady Bird Deed was filed by my lawyer. It only takes a little effort to make sure you are charged the correct amount, and have gotten all the benefits you thought you had and get them in writing.

senda | Dec 5, 2023 | 126 posts since 2015

Never seen that before.
What bank is it?

rockies | Dec 5, 2023 | 295 posts since 2018

@senda
I am trying to use this as a learning opportunity for me (and, perhaps, others). I don't really want to get involved in naming the bank at this point.

IGR | Dec 5, 2023 | 580 posts since 2020

"consequential or incidental damages" is a key. Bank still liable for actual loss.
Anyway, all this is superseded by Statutory Regulations and US Code

choice1 | Dec 5, 2023 | 370 posts since 2023

What about breach of contract? Are consequential and incidental damages associated with negligence or contract breach? Also isn’t a contract breach strict liability?

IGR | Dec 5, 2023 | 580 posts since 2020

what am I, Legal Scholar? if you want 101 of how Commercial Law works, you read the Code or seek professional consulting.
it isn't about "liability" what and when...it is about liability Limit.
You don't have much of the enforceable contract... you have a service agreement, but in general if you voluntarily entered into bad contract - you share the liability.
When and If you break Certificate agreement you are not expected to pay consequential damages to other party, aren't you? The same principal applies to other party. When the agreement is "breached" you can get a professional or the Regulator to help you recovering the damages, but if you get depressed in the process your medical bills aren't other party responsibility.

choice1 | Dec 10, 2023 | 370 posts since 2023

A minor postscript…release of negligence liability (depending on local law) generally do not prevent suing for contract related damages, gross negligence, reckless acts, intentional wrongs or illegal acts. Talk to local and competent counsel

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