A law of December 11 2001 adopting urgent economical and financial measures has improved the situation of banks' clients.

Before refusing to execute a cheque written by a client, banks must now first inform the client that there are insufficient funds in his or her account. This warning is important, as writing a cheque without sufficient funds may bar the author from access to any cheque facilities for five years. In addition, the new law fixes the maximum amount of fees that a bank may duly charge its clients for having written a cheque without sufficient funds.

The main reform brought about by the law consists of a requirment that a written agreement be concluded in order for a person to open a deposit account. This obligation is imposed regardless of the status of the bank's client (ie, whether the client is a professional). The written agreement shall set out the general and financial conditions governing the deposit account, and its content will be defined by administrative regulations. Consequently, the only contractual element that should differ from bank to bank with respect to deposit accounts should be the price of the services offered. However, the required content of the written agreement has not yet been defined.

The law further requires that clients be notified in writing of any modification to the prices, products or services defined in the written agreement. If there is no opposition from the client, the modification will come into force within two months of this notification.

The law also makes it compulsory for a bank to communicate to its client, at least monthly, a statement listing all transactions that have taken place on the client's deposit account. In practice, this monthly statement is already delivered by most banks.

For further information on this topic please contact Philippe Portier or RaphaĆ«le Navelet-Noualhier at Jeantet & AssociĆ©s by telephone (+33 1 45 05 81 96) or by fax (+33 1 47 04 87 98) or by email ([email protected] or [email protected]).