Finance law Essay Example

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Financial Law

Question 1

A number of laws governs business transactions. The laws are intended to protect all parties in a business transaction. The fundamental law is the law of contracts. Under the law, the seller and the potential buyer are bound by certain principles of trade. The elements of a contract have definite provisions and considerations that each intended contract must meet. For instance, parties to a business transaction or deal have to follow rules when making and accepting offers. Similarly, the terms of the agreement before a transaction must be clear and that the signatories must have agreed after careful examination of the contents. The process of making an offer involves the potential buyer making a request to the selling party who in turn makes his offer on the said product (Field 3). Before parties reach a contractual agreement, certain vital elements are considered. A contract is valid and binding when the offer has been unequivocally made to a buyer who accepts the offer as made by the seller. It is vital to note that the offer is withdrawn before the second party accepts. Failing to sell or deliver a product offered amounts to breach of contract. From the case study, NRT Bank offered to open a current account and a $200,000 loan to Amelia. On the other hand, Amelia takes long to accept the offer. After receiving information on Amelia’s dealings and cancels the loan but retains the current account offer. Considering the fact that NRT Bank did not state the time she was to reply, they are obliged to give her a lone.

The private life of each individual affects the finances substantially. However, banks and other institutions are supposed to protect the financial records and information of their clients. Client confidentiality requires that banks keep information relating to clients confidential. Amelia has rights against Big Bank. It is important to note that Amelia’s spending on the casino may be a creation of Big Bank’s manager. Amelia can cite malice and false allegations to ruin her relationship with NRT Bank. Considering the apparent of one customer to a competitor, the manager is apt to have been infuriated. Informing Madison was meant to directly impact the offer and maybe ensure Big Bank retains Amelia. Basing on these, Big Bank has violated her private life and maliciously peddled lies in frantic efforts to retain her as a customer.

In the present day market, consumers have a variety of choices. The stiff competition between companies has resulted in more unique products, which often become their competitive advantage. For NRT Bank, Amelia considers all the options and realizes that no other bank is willing to lend except NRT Bank. It is common knowledge that given two weeks, one is capable of gathering adequate data on the bank’s competitor and weighed the options. Given the offer and the rate of repayment and the fact that none of the banks; including Big Bank cannot offer a loan forcing Amelia to join the bank.

A number of accounts are available for customers. However, different accounts have different features determined by the customers’ needs. Their main differences are identifiable in the mode of deposits and withdrawals as well as the offers that each account type presents the user. Notably, the rate of withdrawals from the account is the fundamental factor of classification of accounts. For instance, a current account is ideal for day to day use because it allows the user to deposit and withdraw money more frequently.

Question 2

In business, communication between the company and customers is fundamental. Changes in company operations especially on customer service should be communicated in due time and busing the most effective media. In order to avoid complications and cases of negligence, companies often keep copies of these communications. Negligence and companies’ disability to understand client provisions have far-reaching effects on companies. The case of Lucky limited and Wealthy Bank is an example of negligence. From the excerpt, it is noticeable that the bank stated clearly the procedure used when they send a bank statement. The bank states the period within which its clients should formally present their complaints in case they notice discrepancies. Whereas the heading and subject of the letter give a different weight to the issue at hand, it sufficiently warns the customers that they should always check the statements and employ their mechanisms to determine if their accounts are erroneously credited or debited. The Bank sets the rule forcing every customer to adhere. Wealthy is therefore not responsible for the loss of the money. On the other hand, Lucky Company is entirely responsible for the loss of its money through poor systems. To begin with, it is clear that the manager acts irresponsibly on the day that the bank sends the letter. Assuming the contents of the letter, he throws the letter aside not bothering to read through. Secondly, the manager realizes that there is a large amount of money that is missing and is not sufficiently accounted for but he chooses not to raise the issue with the bank. Whereas the manager is oblivious of the ten day timeframe the bank sets for lodging such complaints, he neglects this. The managing director discovers that the accountant has been withdrawing money from the kitty for a period. It is interesting that he keeps silent and Fred does it again. From the analysis, the managing director has no grounds to demand that Wealthy Bank is held responsible for the missing money. It is also apparent that the managing director does not communicate with the Bank. On their side, Wealthy Bank communicated with its customers and provided the details of the changes and how they ultimately affect customers who do not heed.

Works Cited

Field, Chris. Elements of a Contract. Western Australian Ombudsman. The Law Handbook. 2013. Web