Bathija v Lloyds TSB Bank plc

Contract – Breach of contract. The claimant's company issued proceedings against the defendant bank (Lloyds) for breach of contract and/or negligence on the basis that its liquidation was the reasonably foreseeable consequence of Lloyd's failure to pay funds to a third party. The Chancery Division, in dismissing the claim, held that Lloyds was in breach of contract in not honouring an instruction to pay. However, assuming that there had been no break in the chain of causation, the claim was too remote, as Lloyds had not taken the risk of being liable for the consequences of a default in the event of the payment being late because of bank error.

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