(a)  The five circumstances that would lead to the determination of the banker-customer contract are as follows:

1. Mutual Agreement: The banker and customer may mutually agree to terminate the contract, such as when the customer decides to close the account and the bank consents, or vice versa, provided all obligations are settled.
2. Notice by Either Party: Either the bank or the customer can terminate the contract by giving reasonable notice to the other party. For current accounts, this is typically implied under common law, with the duration of notice depending on the circumstances (e.g., Prosperity Ltd v Lloyds Bank Ltd (1923) established that reasonable notice must be given before closing an account).
3. Operation of Law: The contract terminates automatically under operation of law in events such as the death, mental incapacity, or bankruptcy/insolvency of the customer, as these render the customer incapable of maintaining the contractual relationship (e.g., under the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930), banks must freeze accounts upon notice of death or insolvency).
4. Court Order: A court order, such as a garnishee order, injunction, or sequestration, can lead to termination or suspension of the contract, compelling the bank to close or restrict the account.
5. Breach of Contract: Serious breach by either party, such as the customer’s persistent issuance of dishonored cheques or fraud, or the bank’s failure to honor valid instructions, can justify termination without notice in extreme cases, though banks prefer notice to avoid liability.

(b) Yes, I agree that the banker-customer relationship may continue notwithstanding the determination of the banker-customer contract. The contract termination ends the ongoing operational agreement (e.g., day-to-day account management), but certain rights, duties, and liabilities persist due to the debtor-creditor nature of the relationship.

• Explanation: The primary contract is one of debtor (bank) and creditor (customer) for funds deposited, as established in Foley v Hill (1848), where the House of Lords held that the banker’s obligation to repay deposits on demand forms the core of the relationship. Even after account closure, if there are outstanding debts (e.g., overdrafts) or credits (e.g., unclaimed balances), the relationship continues until full settlement. For instance, the bank retains a duty of confidentiality under common law and Section 131 of Act 930, which survives termination. Similarly, rights like set-off (combining accounts) can be exercised post-closure if debts remain.
• Legal Authority: In Joachimson v Swiss Bank Corporation (1921), the Court of Appeal ruled that the banker-customer relationship implies a contract terminable on notice, but repayment obligations persist. In Ghana, this aligns with Act 930, where banks must handle post-closure matters like dormant accounts (transferred to BoG after 5 years per BoG directives) or litigation. Practical example: During the 2017-2019 banking cleanup in Ghana, resolved banks like UT Bank had ongoing relationships with customers for asset recovery, despite license revocation.

Thus, while the contract ends, residual obligations ensure continuity for resolution.

(c) The bank’s position in the scenario is legally defensible in parts but exposed to potential liability due to improper handling of account closure, set-off, and post-closure credits/cheques. The underlying legal principles revolve around the right to close accounts with notice, the exercise of set-off, and duties post-termination, grounded in common law and Ghanaian statutes like Act 930 and the Bills of Exchange Act, 1961 (Act 55).

• Account Closure and Cheque Presentation: The customer threatened to close the account, which could be interpreted as notice from the customer, allowing the bank to act. However, the bank closed the account unilaterally after the GHC 15,500 cheque was presented against a GHC 15,300 balance (likely a typo for GHC 15,300), leaving GHC 200 transferred to fees. Under Prosperity Ltd v Lloyds Bank Ltd (1923), banks must give reasonable notice before closure unless the account is in debit or there are exceptional circumstances (e.g., fraud). Here, the customer’s habit of countermanding cheques and debts to creditors suggests potential insolvency risk, justifying closure without notice to protect the bank (per Act 930, Section 128 on risk management). But the bank should have returned the cheque as “Refer to Drawer” or “Insufficient Funds” before closure, not close mid-process. This exposes the bank to a breach of contract claim for wrongful dishonor under Act 55, Section 47.
• Application of Set-Off: Transferring the GHC 200 balance to commissions and fees implies set-off, which is valid if accounts are in the same right and matured (Devaynes v Noble (Clayton’s Case, 1816) on appropriation). In Ghana, Act 930 permits set-off for fees, but it must be reasonable and notified. If the fees were legitimate (e.g., for returned cheques), this is defensible; otherwise, it’s conversion of funds, liable under tort law.
• Post-Closure Credit and Cheque Return: Receiving GHC 15,000 Treasury Bill proceeds after closure creates a continuing relationship, as the bank becomes a debtor for these funds. Returning the subsequent cheque as “Account Closed” is correct if no account exists, but the bank must now hold or repay the GHC 15,000 (plus any prior balance) to the customer upon demand, per Joachimson v Swiss Bank. Failure to do so could lead to detinue or conversion claims. Practical insight: In Ghana, post-DDEP (2022-2024), banks like GCB handled matured investments post-account issues by creating escrow or notifying BoG, emphasizing compliance.
• Overall Bank’s Position and Risks: The bank is strong on protecting against potential losses from the customer’s debts and countermanding behavior, aligning with BoG’s risk directives (e.g., Operational Risk Guidelines under Basel II). However, abrupt closure without clear notice or communication risks a breach claim, potentially awarding damages for loss of banking facilities or reputational harm. To mitigate, the bank should offer to reopen or transfer funds, citing cases like Woods v Martins Bank Ltd (1959) on fiduciary duties. If sued, defenses include implied notice from the customer’s threat and operational necessity.

Recommendation: Document all actions, seek legal advice, and settle amicably to avoid court, as Ghanaian courts (e.g., in recent cases like those post-2019 cleanup) favor banks acting prudently but penalize procedural lapses.