Discharge-for-value defense: Difference between revisions
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{{a|negotiation|}}{{Discharge for value capsule}} | {{a|negotiation|}}{{Discharge for value capsule}} | ||
There is no equivalent under the English law of [[restitution]] | There is no equivalent under the English law of [[restitution]], where an enriched lender has to return the money: {{casenote|Barclays Bank Ltd|WJ Simms}}. This darkened cranny of the common law was exposed to harsh daylight when Citigroup tripped over it when trying to reclaim half a [[yard]] they’d accidentally shelled out to some distressed debt lenders to Revlon in 2020. | ||
I bet Citi wished they were English. | |||
{{sa}} | {{sa}} | ||
*[[Restitution]] | *[[Restitution]] | ||
*{{casenote|Citigroup|Brigade Capital Management}} | *{{casenote|Citigroup|Brigade Capital Management}} | ||
*{{casenote|Barclays Bank Ltd|WJ Simms}} | *{{casenote|Barclays Bank Ltd|WJ Simms}} | ||
Revision as of 13:03, 17 February 2021
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Negotiation Anatomy™
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The discharge-for-value defense defeats a claim for unjustified enrichment under New York law where a recipient, without notice of mistake and not having induced the payment, receives funds that discharge a valid debt:
“When a beneficiary receives money to which it is entitled and has no knowledge that the money was erroneously wired, the beneficiary should not have to wonder whether it may retain the funds; rather, such a beneficiary should be able to consider the transfer of funds as a final and complete transaction, not subject to revocation.” Banque Worms v Bank America (1991) 570 N.E. 2d 189
There is no equivalent under the English law of restitution, where an enriched lender has to return the money: Barclays Bank Ltd v WJ Simms. This darkened cranny of the common law was exposed to harsh daylight when Citigroup tripped over it when trying to reclaim half a yard they’d accidentally shelled out to some distressed debt lenders to Revlon in 2020.
I bet Citi wished they were English.