Bank Right Of Setoff System Research

The legal system ,which regulates the bank's right of set-off, as an essential and important system, has not been set up efficiently and perfectly. For the reason that, the balance of rights between the bank and the customer is the intention and the starting point of the system, the research from the angle of the balance will be of great practical and theoretical value. This paper attempts to apply Macneil's theory about relational contract and the theory about the weak status of the customer. Under the help of theories above-mentioned, the research on the balance of rights should consider the relational rules (unity, cooperation and consultation) and the protection of the customers. Applying the foregoing conclusions, we can infer that the bank's set-off should be set up to protect the bank as a creditor, or the balance will fail. The bank's set-off has the following characters: self-remedy, simple and convenient, efficient. Based on such characters, the right of set-off in bank is the best method to protect the bank as the creditor. In the system of set-off in bank, the bank and the customer are in a complicated relational net, and as a result, they are connected tightly. Consequently, the relational rules and the protection of the customers should also be emphasized, and the weak status of the customers should be changed. Further to explain, the relational factors can not be negligent, the mechanism of consultation should be established, the bank's set-off should be restrained through terms and conditions and procedures, the customer has the dissenting right about the bank's set-off, and the customer should be self-protecting. This paper has four chapters to discuss the above points of view.Chapter one deals with the justification of the angle that the balance between the bank and the customer. This chapter proves that such angle to do the research on the right of set-off in bank, is essential and reasonable.