Banks and Banking - Validity of Exculpatory Clauses in Stop-Payment Orders

Authors

Lawrence N. Ravick S.Ed., University of Michigan Law SchoolFollow

Abstract

Plaintiff, a depositor in defendant commercial bank, in seeking to stop payment of his check, executed and left with the bank a printed form supplied by the bank, entitled ''Request to Stop Payment of Check." Among the terms of the paper was a provision which constituted a release of the bank from all liability should it pay the check through "inadvertence, accident or oversight." The bank subsequently honored the check and charged its amount against the plaintiff's account. Plaintiff demanded that the defendant refund this amount, but the defendant refused to do so. Plaintiff thereupon brought an action against the bank to recover the amount of the check. The trial court's judgment for the plaintiff was reversed by the intermediate appellate court. On appeal to the Pennsylvania Supreme Court, held, the trial court's judgment reinstated. An exculpatory clause in a stop-payment order like the one in the present case is void as against public policy. Thomas v. First National Bank of Scranton, 376 Pa. 181, 101 A. (2d) 910 (1954).

Recommended Citation

Lawrence N. Ravick S.Ed., Banks and Banking - Validity of Exculpatory Clauses in Stop-Payment Orders, 53 Mich. L. Rev. 128 (1954).
Available at: https://repository.law.umich.edu/mlr/vol53/iss1/10