Lawlink NSW: Issues Paper 17 (2000) - Guaranteeing Someone Else's Debts

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Issues Paper 17 (2000) - Guaranteeing Someone Else's Debts

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History of this Reference (Digest)

Link to Summary

Contents

Terms of reference
Participants
Submissions

1. INTRODUCTION
WHY THIS REVIEW?
Other reviews
Increasing awareness of issue
Consumer protection
Small business
OUTLINE OF ISSUES PAPER

2. THE CURRENT LAW
OUTLINE OF THIS CHAPTER
WHAT IS A THIRD PARTY GUARANTEE?

The parties to a transaction

Setting aside/varying guarantees

THE COMMON LAW
Unconscionable conduct
Other common law issues

Mistake

Misrepresentation

Undue influence

Duress

A special rule for wives?

Australia

England

STATUTORY PROVISIONS
Contracts Review Act 1980 (NSW)
Trade practices legislation

Unconscionable conduct

Misleading or deceptive conduct

Remedies available

Consumer Credit (New South Wales) Code

Unjust contracts

Specific requirements

Farm Debt Mediation Act 1994 (NSW)
OTHER APPROACHES
Abstract control

European Community directive on unfair terms in contracts

Provisions in Australia

3. OPERATION OF GUARANTEES
OUTLINE OF THIS CHAPTER
BACKGROUND TO ENTERING A GUARANTEE
The role of relationships
Commercial stability and certainty
SOURCES OF LAW AND PRACTICE
Consumer Credit Code
Industry practice
PROCESS OF ENTERING A GUARANTEE
Provision of information about the principal loan

Common law

Consumer Credit Code

Industry codes of practice

Types of information to be provided

Unjust circumstances surrounding the signing of a guarantee

The place where a guarantee is signed

Pre-contractual advice on the nature and effect of guarantees

“Independent legal advice”: The Solicitors’ Practice Rules

The value of independent legal advice

THE GUARANTEE DOCUMENT
Legibility and plain English
“All moneys” clauses
LATER OPERATION OF A GUARANTEE
Ongoing advice and information

Consumer Credit Code

Industry practice

Unilateral variations to the loan

Consumer Credit Code

Discharging the guarantor from a guarantee

Consumer Credit Code

Enforcement through the courts

Consumer Credit Code

Industry practice

Alternative dispute resolution

4. ISSUES TO CONSIDER
THE NEED FOR MORE INFORMATION
How prevalent is the use of third party guarantees?
In what circumstances are guarantees required by lenders?
THE BUSINESS/CONSUMER DISTINCTION
INFORMATION AND ADVICE
FORMALITIES
ENFORCEMENT ISSUES
RELATIONSHIPS: CONTRACT LAW AND RELATIONSHIP
DEBT
LIMITING THE USE OF GUARANTEES?
OTHER ISSUES

TABLE OF LEGISLATION
TABLE OF CASES
BIBLIOGRAPHY

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Last updated 29 October 2001

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