Issue 2. 2022 35 The American writer Greg Bear famously quipped, “It is the bullets you don’t hear that gets you.” Banks and other institutions are usually adept at avoiding liabilities when they properly understand their legal duties. But when legal duties are unclear or misapprehended, troubles can arise. So, what duties does a bank owe to its customers? And what, if any, duties does it owe to a non-customer? TORT LAW VS. CONTRACT LAW Except for the duties created by statute, the law recognizes two main types of legal duties. The first type is created by tort law, which protects people and their property from physical harm by imposing a duty of reasonable care. For example, a bank must ensure that its lobby is free of tripping hazards. A party who is THE UTAH COURT OF APPEALS CLARIFIES THE DUTIES A BANK OWES TO CUSTOMERS AND NON-CUSTOMERS injured by a bank’s negligence may suffer significant harm and may receive significant compensation from a negligent party. The second type of duty recognized by the law is based on contracts or agreements. In this instance, recoverable damages are more limited. Here the law protects expectancy interests. It merely ensures that parties obtain the benefit of their bargains, and damages are therefore much more limited. Many of the most interesting questions — and most of the bullets that might surprise a bank — arise at the boundary between tort law and contract law. Because obtainable damages under tort theories can often be much higher than those obtained under contract theories, plaintiffs frequently seek By Brent Wride, Shareholder at Ray Quinney &Nebeker continued on page 36
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