Categorically state the difference between bankers duties to a customer in regards to appropriation, set-off and lien
Appropriation, set-off, and lien are all legal terms that describe different actions or rights that a banker may have in relation to a customer's account. Here is a categorical statement outlining the differences between these three:
1. Appropriation: Appropriation refers to the act of allocating funds from a customer's account to satisfy a specific debt or obligation. The banker has the duty to appropriately apply the customer's payments according to their instructions or, if not specified, in a way that is consistent with the terms and conditions of the account agreement. The purpose of appropriation is to ensure that the customer's funds are used appropriately and in line with their intentions or contractual obligations.
2. Set-off: Set-off is the banker's right to deduct money from a customer's account to offset any outstanding debt owed by the customer to the bank. This typically occurs when the customer has multiple accounts with the same bank and the bank exercises its right to transfer funds between these accounts to satisfy the debt. The banker has the duty to exercise set-off in accordance with specific legal requirements and any contractual arrangements between the bank and customer. The purpose of set-off is to allow the bank to recover unpaid debts by utilizing the customer's own funds on deposit.
3. Lien: A lien is a legal right that enables the banker to retain possession of a customer's assets or property until a debt or obligation is fulfilled. In the banking context, a banker may have a lien over a customer's account, which means that they can hold onto the funds in the account as security for any outstanding debt owed by the customer. The banker has the duty to exercise the lien in compliance with applicable laws and regulations, and they may have to follow specific legal procedures to enforce the lien. The purpose of a lien is to provide the bank with a form of security by granting them the right to retain the customer's assets until their obligations are met.
Overall, appropriation deals with how funds are allocated, set-off relates to using funds from one account to offset debts in another account, and lien involves the retention of assets as security until outstanding debts are settled. Each of these actions or rights has distinct purposes and obligations for the banker in their dealings with a customer's account.