Abstract
This dissertation discusses the potential liability of a bank for negligent conduct arising from
an electronic funds transfer, for example, instances where a bank customer (the originator)
sends or carries out a transaction via electronic banking to the wrong account at the same or at
another bank.
It is important to note the difference between a funds transfer between an originator and
beneficiary holding accounts at the same bank, and one in which the originator and beneficiary
hold accounts at different banks. In the former, there is a contract between the originator of the
payment instruction and the recipient’s bank – the beneficiary bank. In the latter, however,
there is no such contract. It is especially in the latter case that the question is problematic since
any liability of the beneficiary bank will have to be based on delict which will entail the
existence of a legal duty on the bank as against the originator.
The dissertation investigates the requirements of delictual liability, namely, conduct,
wrongfulness, causation and damage in this context. The most crucial element is wrongfulness,
in the form of conduct in breach of a legal duty. Once this is proven, and provided the plaintiff
has suffered a loss, delictual liability of the bank is potentially possible.
The loss concerned is pure economic loss. Courts have been reluctant to extend delictual
liability for pure economic loss. In Administrateur, Natal v Trust Bank, the court first
recognised that such an action can lie. The potential of it being extended to electronic funds
transfers to a wrong account – which has been given impetus in the case Peterson v Absa Bank
Ltd forms the heart of this research.
Case law and academic opinion is considered, as well as some comparative insights, before a
conclusion is formulated.
LL.M. (Commercial Law)