Critics of concept of current account banking contracts as a separate type of civil law contracts

Abstract

Legal entities that are obliged by the state to deposit their money onto the accounts in commercial banks appear in the situation of collapse of their business when they cannot withdraw their money. The reason for that is as follows. Banks unfairly got the right to use money on client’s current accounts. But it is impossible at the same time to use money of a client and provide him an opportunity to dispose the same money on first demand. The author criticizes a widespread doctrinal position that money on current accounts are not the clients’ property and could not be the object of vindication from the bank or from the third parties illegally holding this money. Modern meaning of the term “irregular custody” (depositum irregulare) is different as compared with that in Roman law because in the Medieval times the custody contract was changed. The elements of Roman law contracts of regular custody and irregular custody (“old irregular custody”) were joined to the new legal construction, that is “new irregular custody”. Commercial bank is a kind of a warehouse. The current account contracts are not a special type of civil law contracts. They are moreakin to warehouse storage contracts. Proper money regime on current account should be as the storage in a warehouse (new irregular custody). The reform of general legal regime of bank accounts is necessary to divide them into a) current accounts in the custody regime with general ban for the banks to use this money and pay interest to clients, b) deposit accounts in the loan regime with prohibition of their pre-schedule withdrawing by clients. Both the vindication lawsuit and breach of contract lawsuit are able to protect the rights of parties of the current account contract. It appears that there is “individual mixed property” between all owners of money on current accounts in a certain bank. It is suggested that the classification of civil contracts should be based upon economic (sometimes moral) final expected effects, and upon technical aspects of their performance, as well as public law obligations of their parties etc.

Keywords:

bank account, deposit, depositum irregulare, property, vindication, storage, warehouse