Common law and equitable aspects of unjust banking contracts: a legal analysis
Like the doctrines of misrepresentation, misleading or deceptive conduct, and undue influence, the taking of unfair advantage or unconscionable conduct may be relevant to the problem of bank guarantees being entered into without adequate understanding or consent. A guarantee or surety of this kind is, incidentally, a contract in which one party (the guarantor) promises another (the lender bank) to meet the debt obligation of a third party (the borrower) should the borrower fail to do so. Typically, a guarantee involves the guarantor accepting a liability in a contractual relationship which appears, on the face of it, to be improvident as the guarantor derives not tangible benefits from it by way of a claim against the creditor or the principal debtor.
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