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LAW30002 Finance Law Mid-semester Assignment Edgar is an 18-year old university student who has just moved to Melbourne. He goes to the Hawthorn Bank to

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LAW30002 Finance Law Mid-semester Assignment Edgar is an 18-year old university student who has just moved to Melbourne. He goes to the Hawthorn Bank to open two bank accounts. He persuades the bank to provide him with an overdraft. After Edgar and the banker talked everything through, Edgar signs a contract. The contract contains a clause that states: "The customer dumarises me Howmom Bank to combine ary accounts hold in the customer's hume. No further approval is repaired. The only condition is that Hawthorn Bank must informo the customer about As intention to combine accounts and set a 7 duy deadline to give the customer me opportunity to clear the account. " Edgar has a part-time job in a supermarket where he works every Sunday. His wages are paid into account 1. Edgar has expensive hobbies and he always wants to have the newest gadgets. Consequently, account 1 is mesdy overdrawn to the maximum limit of $5,000. Edgar's dad, James, makes hismoney from running an illegal gambling business. In order to whitewash the profits he gives them to Edgar, who deposits the money into account 2. Therefore, account 2 looks much better than account 1 showing a credit of $150,000. The bank has contacted Edgar twice and asked him to balance account 1. Edgar ignores the bank's requests. Three weeks later, the bank exercises its right of combination to repay the overdraft. The bank notifies Edgar afterwards. Meanwhile, Hawthorne Bank becomes suspicious of the amount of money that is flowing through Edgar's account, since it does not correspond to the income expected from a student. The bank comes to you and asks for your advice. Please discuss the following legal issuess (1) Discuss whether Hawthorn Bank is acting within its rights to combine the accounts that were opened in Edgar's name. (201 (2) Hawthom Bank owes Edgar a duty of confidentiality. Discuss what the duties of the bank are regarding the transactions that James is channelling through account 2. (201 TOTAL: 40 Word limit: 1,500 [excluding bibliography)

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