A bank's contractual duty to its customer includes a duty not to honour cheques where circumstances put the bank on inquiry that company funds may be misappropriated for a director's personal benefit. The ordinary banker-customer relationship does not give rise to fiduciary obligations or a duty to advise on the commercial prudence of transactions. Where a bank's own breach of contract is the proximate cause of loss, a counterclaim by the bank based on the customer's misrepresentations in the loan application will fail on causation, even where those misrepresentations induced the bank to enter the lending relationship.
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