Section 856: Current account (compte courant), definition

Supreme Court decisions interpreting this section

1. Supreme Court Judgment No. 469/2543 (2000)

   A current account under Section 856 is informal; it may be constituted by express agreement or inferred from the parties' conduct and banking documentation.

   A current account contract under Section 856 requires no particular form and need not be evidenced in writing; it may arise from express agreement or from the conduct of the parties, including the terms of a cheque account application.

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2. Supreme Court Judgment No. 7821/2542 (1999)

   An overdraft contract with no fixed end date is a current account that continues while the account runs. It ends only when the parties agree to end it, or when EITHER party calls for the account to be struck and the balance paid, and the creditor right to payment arises at that point (sections 856 and 859); compound interest may be charged until then. A rate raised after termination, under the lender own announcement for credit in breach of conditions, is a penalty and may be reduced. And a guarantee expressed as liability as a joint debtor continuing until the bank is paid in full and covering accessory obligations means only that the guarantor loses the defences in sections 688, 689 and 690: it does not raise the guaranteed principal above the sum stated in the guarantee, although interest may carry the total above that figure.

   A bank sued on an overdraft with no fixed term. The customer last drew by cheque on 8 May 1996, after which the only entries were the bank monthly capitalisation of interest. The Supreme Court held that such a current account ends only by agreement or when either party calls for the account to be struck and the balance paid under sections 856 and 859, so it ended on 30 June 1998, the date fixed in the bank notice of termination, and compound interest could be charged to that date. The 25 percent the bank then charged from 1 July 1998, taken from its announcement for credit in breach of conditions and never charged before, was an increase imposed after termination and was therefore a penalty, which the Court reduced to 19 percent. On the guarantee, the words making the guarantor liable as a joint debtor until the bank was paid in full and covering interest, compensation and enforcement costs meant only that he could not raise the defences in sections 688, 689 and 690; they did not make him liable for principal beyond the 3,000,000 baht stated, though interest could carry his total liability above it.

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Curated decisions with case numbers verified against the Supreme Court database. English renderings are the firm's editorial translation for study.