Banking in the Digital Age: Horton v. JPMorgan Chase Bank
Once Horton opened the account in question, she signed and agreed to JP Morgan’s “Account Rules and Regulations.” Horton then became bound to the terms and conditions, and they may be amended once in a while. On November 14, 2011, however, the bank received a notice to switch the account to a joint account. The two account owners purportedly signed the note as it also contained Horton’s signature. She contended the subject account’s switch and funds withdrawal. However, the court ruled in favor of the bank. This ruling was right.
First, Horton’s notice was not within the time limits detailed in the bank’s terms and conditions. The rights and duties of banks are stated in Article 4 of the UCC. Horton was expected to review the monthly account statement and notify J.P Morgan’s bank of any errors in transactions within 30 days after receiving the account’s statement. However, Horton failed to provide any notice within the given time frame.
One of Horton’s counterclaim was that the economic loss rule barred her negligence claim. This rule usually precludes compensation for financial losses arising from the failure of a party to perform under a contract where the damage consists solely of the economic loss of a contractual obligation (Geistfeld, 12). However, she contended that the economic loss rule was not binding in this particular case. A bank’s association with a general depositor is contractual, that of the debtor-creditor resulting from depository agreement. Hence, the economic loss rule bars her negligence claim. Therefore the court was right to overrule Horton’s third claim.
Work Cited
Geistfeld, Mark. “The Contractually Based Economic Loss Rule in Tort Law: Endangered Consumers and the Error of East River Steamship.” (2016).