Bank Has Implied Contractual Obligation to Return Improperly Transferred Funds to Depositor

On August 26, 2021, the Fourth Department issued a decision in Thompson v. Peters, 2021 NY Slip Op. 04832, holding that a bank had an implied contractual obligation to return improperly-transferred funds to a depositor, explaining:

Applying the appropriate standards on a motion to dismiss, we conclude that, contrary to the contention of the Bank, the first cause of action states a valid claim for breach of implied contract against the Bank. It is well settled that the relation between a bank and its depositors is that of debtor and creditor, and the bank is bound by an implied contract to repay the deposit on the depositor’s demand or order. Given our conclusion, we necessarily reject the Bank’s related contention that the first cause of action should be dismissed as a matter of law because plaintiffs have failed to specify any contractual term breached by the Bank. The very purpose of a theory of liability based on implied contract is to afford an aggrieved party an equitable remedy where the parties have not established the existence of a legal remedy based on a valid and enforceable written contract governing their dispute.

(Internal citations omitted).

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