Reappraisal of the Vulnerability of Contract Securities: Some Comparative Perspectives of a Regulatory Mosaic
This article examines the vulnerability of sureties who give contract securities or guarantees-the most commonly used securities in the commercial world. Such securities are signed by sureties in situations where they have little information about important aspects of the contract. It is not often, for example, that sureties have sufficient information about the borrowers' loans or the financial health of their business. Such knowledge is invaluable if sureties are to give a fully informed consent to participate in the transaction. The vulnerability of the sureties is evident where pressure and coercion from the creditor may affect the former's judgment so that they are then not able to act in a fully independent manner, fully aware of the risks involved.