Problem based on advise peter-mary as to their legal rights

Assignment Help Business Law and Ethics

Reference no: EM133455409 , Length: Words Count:1500

Assignment:

Peter and Mary are poorly educated immigrants who speak little English. They have both just retired from full time work and own their own house. Their son, Fred approaches them and asks whether they would be prepared to lend him some money to start a new business. They say that they will not lend Fred the money but would be prepared to help him borrow some money from a bank or other lending institution. Fred then had discussions with the River Bank who offers him a loan of $100,000 on condition that repayment of the loan is guaranteed by Peter and Mary and supported by a mortgage over their house. Fred also arranges for a mobile lender to visit Peter and Mary to discuss the matter with them.

At that discussion, where Fred was present neither he, nor the mobile lender fully explained the nature and effect of the documents that the Bank was asking Peter and Mary to sign nor were they given the opportunity to seek legal advice. Both Fred and the mobile lender did however assure Peter and Mary that 'everything would be all right'. After Peter and Mary signed the guarantee and mortgage the Bank lent Fred the $100,000 and Fred then established his new business. Some months later Fred's business failed, and he was unable to make any further payments to the Bank on the loan. The Bank then gave notice to Peter and Mary that it was demanding repayment of Fred's loan and that if they did not comply with the notice the Bank would take action to take possession of their house and sell it at public auction. REQUIRED Advise Peter and Mary as to their legal rights.

NOTES

1. The style you should adopt for your answer to this question should follow the PIRAC approach to solving problems.

2. Passages in the text with which you will need to be familiar include - a. Paragraphs 5.78 - 5.82 b. Paragraph 4.92 - 4.97 You are not confined to text book references and I encourage you to read and research more widely if you can.

3. Be careful how you expend your allotted 1500 words to answer the question. I suggest you adopt a report format rather than writing an essay. In a report you should use short, numbered paragraphs and you may use dot points.

4. Your report should conclude with a list of the cases, legislation or text references which provide support for your contentions. The cases you use should also appear in the text of your answer with the full citation. You can use footnotes if you wish.

Reference no: EM133455409

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