Using both australian consumer law and common law

Assignment Help Business Law and Ethics

Reference no: EM133506602

Case Study: Johnie Walker is a local business person who believed that he had finally hit on a concept that was going to to make him incredibly wealthy. Johnie had made many, usually unsuccessful attempts to get rich quick. Johnie calculated that he would establiah this business venture. Knowing that he did not have the cash required Johnie decided toMega Bank for a loan.

Johnie contacted Mega Bank and made an appointment with the local branch lending officer for 10.30 am on Wednesday 18
April. During Johnie's appointment Mega Bank indicated that they were very impressed with Johnie's business idea and would be happy to advance the $300,000. The only requirement was that someone would need to guarantee Johnie's loan. Johnie commented to the lending officer that his father would most likely provide the bank with a guarantee.
The following day Johnie spoke with his father Jack, who agreed to assist Johnie in his business venture. An appointment was made for both Johnie and Jack to meet with the lending office on the following day.
At the appointment the lending officer placed the guarantee forms in front of Jack and pointed out where he needed to sigJack in his very poor English asked what the guarantee meant. The lending officer and Johnie gave Jack a very brief explanation and told him that he had nothing to be concerned about. In fact the lending officer had another appointment and asked Jack to hurry up and just sign the paperwork.Jack signed the bank guarantee and the $300,000 was deposited in Johnie's account the following day
Eight months latter Johnie's business venture was in ruins and he was unable to make any payments on the loan. Mega Bank as was their right under the bank guarantee called upon jack to pay out amount outstanding. Jack was unable to do so and Mega Bank have threatened to sell his home.

Jack has approached you seeking advice on the possibility of having the bank guarantee terminated.

Question: Using both Australian Consumer Law and common law, advise Jack on the likelihood of him being able to terminate the bank guarantee between himself and Mega Bank

Reference no: EM133506602

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