Practice question
The bank’s handling is negligent but the record establishes an honest mistaken belief and no fraud or bad faith. The claimant argues that the negligence finding alone necessarily supplies moral damages in the contractual case. Which is correct under Areza?
- Every negligent act automatically supplies bad faith
- The moral-damages predicate must be examined separately; Areza did not equate honest error with bad faith.
- The bank therefore owes no correction of any erroneous debit
- A negligence finding always cancels all contracts
- Only the bank’s preferred label decides
Legal references
- Areza v. Express Savings Bank, G.R. No. 176697, September 10, 2014, main decision: https://lawphil.net/judjuris/juri2014/sep2014/gr_176697_2014.html
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