Are Contract Notes Legally Binding?

[juliethemoose]

I Have a barclays marketmaster account, and I purchased RBS and BARC shares on the Ex DIV date. On my contract note for both trades it said cum dividend. I had only been trading a week so did not realise this was an error.

Are contract notes legally binding? In a letter from Barclays it states "Our contract notes are subject to errors and ommisions, and can be changed at a later date."

Does this statement defeat the object of Contract notes?

Interestingly I have been sent a form to sign that says" I accept your ex gratia offer of two free Marketmaster trade, in FULL and FINAL settlement of my complaint against Barclays Stockbrokers."

Can anyone help me please?

J

 

[Directional]

On my contract note for both trades it said cum dividend.

Does this mean you get cum as a dividend?

 

[Lee Shepherd]

Unfortunately they (Barclays-brokers) dont have to assume any liability whatsoever..but.

What they have done (under ex gratia) is give you 2 free trades (free of trading commission) with them to respond as an apology and voluntarily but not accepting liability as is covered under there terms and conditions that state "Our contract notes are subject to errors and ommisions, and can be changed at a later date."

Fighting this would be futile and you'd be best to accept there voluntary and, somewhat generous offer. Legally they dont have to offer anything at all.

You can pursue it further with a drawn out process which could involve legal costs but beware that they have not and do not accept liability, nor do they have to.

So if you wish not to pursue this matter further then you can sign the form they sent regarding ex gratia, get your 2 free trades and no hard feelings between you and your broker. The shares are ex-div so none will be paid what ever the contract says.

Hope this helps.

I Have a barclays marketmaster account, and I purchased RBS and BARC shares on the Ex DIV date. On my contract note for both trades it said cum dividend. I had only been trading a week so did not realise this was an error.

Are contract notes legally binding? In a letter from Barclays it states "Our contract notes are subject to errors and ommisions, and can be changed at a later date."

Does this statement defeat the object of Contract notes?

Interestingly I have been sent a form to sign that says" I accept your ex gratia offer of two free Marketmaster trade, in FULL and FINAL settlement of my complaint against Barclays Stockbrokers."

Can anyone help me please?

J

 

[grantx]

Ms Moose,

Does the purchase price on the contract note correspond with the purchase price on the date of the trade? If so,
what’s the problem – you’re now entitled to next dividend. Or was their a particular reason for buying on the ex-div date - that they might fall by the dividend amount and therefore would be cheaper?

I would say a contract note is merely a record or confirmation of a transaction (contract); I can’t see any “binding” implication. The binding agreement is the price given and accepted at time of the trade, even if unwritten (but it will be recorded).

Grant.

 

[A Dashing Blade]

I would say a contract note is merely a record or confirmation of a transaction (contract); I can’t see any “binding” implication. The binding agreement is the price given and accepted at time of the trade, even if unwritten (but it will be recorded).

Agree.
But what is at issue here is the "cum-div" part of the bargin. Will ask the equity boys later on today.

 

[grantx]

DB,

"what’s the problem – you’re now entitled to next dividend" (my quote). We need to know the point of contention.

Grant.

 

[A Dashing Blade]

In the bond world, settlement is usually T+2 (today plus 2 business days) ie that is the day by when you must have paid cleared funds in the sellers account, and the day by which he must have transferred legal ownership of the bonds to you.

Dunno how equities work now, but I'm thinking that if if you buy on XD day (= the day on which, if you have legal ownership of the shares, you are entitled to receive a dividend), and say equities are on T+2, you are not the legal owner untill after XD day ergo you don't get a div.

 

[grantx]

DB,

You are the owner legal owner of the stock at time of purchase. However, if the stock is xd at time of purchase, you are not entitled to the current (just paid) div. The xd period last a few days (?); when they become cum div, you are entitled to the next div.

In bond market terms, the xd price is the "clean" price, the cum div is the "dirty" price.

"ergo"? We'll have none of your fancy classical ways 'ere, mate.

Grant.