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Commercial Law — Financial law — Commercial sureties — Banking practice żżż value dates for debits and credits

Date Citation Note
06.04.1993 Com. 1006 Bull. Civ., n° 138, 94 JCP G n° 23 09.06.93 p.212 Case Suren v. Banco Exterior France “Value dates”, “cause” and bank accounts
French banks customarily apply what they call “value dates” to transactions recorded in the accounts of their customers. The banks back-date debits and post-date credits to these accounts. The result is principally that a bank has the free use of the customer’s funds during the extra periods thus created; and, where interest is concerned, it pays less on credits and receives more on debits. This case concerns the validity of this practice. It also, incidentally, concerns the period over which interest can be capitalised in relation to a current account.
Held:
(1) Article 1154 of the Civil Code, which provides for capitalisation of interest over a period of at least a year, does not apply to current accounts.
(2) There is no valid ground which justifies the practice of applying dates to current accounts other than those upon which the relevant transaction occurred. Pursuant to Article 1131 of the Civil Code, such a practice is not supported by consideration (“cause”).