n Lesotho Law Journal - The liability of a commercial bank for fraudulent activities of its manager : the NBS bank cases & other related cases
|Article Title||The liability of a commercial bank for fraudulent activities of its manager : the NBS bank cases & other related cases|
|© Publisher:||National University of Lesotho|
|Journal||Lesotho Law Journal|
|Affiliations||1 National University of Lesotho|
|Publication Date||Jan 2015|
|Pages||37 - 59|
This paper looks at the liability of a commercial bank to third parties where the manager exceeds his given mandate by fraudulently concluding transactions that are not within his scope of authority in the name of the bank for his own benefit. It is shown that on the basis of agency by estoppel, the bank manager has ostensible authority to bind the bank if it made a representation to the outside world that the manager had authority to act bind the bank and the fraudulent transaction is concluded in the ordinary course of business of the bank. The bank will however not be bound if the third party knew the transaction was unlawful and one which the bank would not countenance.
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