Foyle Legal provides legal advice for guarantors and borrowers. This advice normally involves a one hour consultation where a solicitor will explains the effect of the loan documents to the borrower or guarantor. Borrowers and guarantors often come to Foyle Legal after the bank granting the loan tells them that they must obtain independent legal
Foyle Legal provides legal advice for guarantors and borrowers. This advice normally involves a one hour consultation where a solicitor will explains the effect of the loan documents to the borrower or guarantor. Borrowers and guarantors often come to Foyle Legal after the bank granting the loan tells them that they must obtain independent legal advice before the bank will agree to provide the loan.
Borrowers and guarantors think they know what they are getting themselves into and ask why the bank requires that the borrower or guarantor obtains independent legal advice. There are legal authorities to the effect that if a bank manager does not make due enquiries or the guarantor / borrower does not obtain independent legal advice then the loan or a guarantee associated with a loan may be void for undue influence or unconscionable conduct.
For example, in the early High Court case of Yerkey v Jones (1939) 63 CLR 649, which has been quoted with approval in subsequent cases, the court said that it would be unconscionable to enforce against a surety if:
- in fact the surety did not understand the purport and effect of the transaction;
- the transaction was voluntary (in the sense that the surety obtained no gain from the contract the performance of which was guaranteed);
- the lender is to be taken to have understood that, as a wife, the surety may repose trust and confidence in her husband in matters of business and therefore to have understood that the husband may not fully and accurately explain the purport and effect of the transaction to his wife; and yet
- the lender did not itself take steps to explain the transaction to the wife or find out that a stranger had explained it to her.
Foyle Legal would suggest that banks appear to have made a decision that prudent for risk management to require the borrower or guarantor to obtain independent legal advice rather than risking the possibility that a bank employee will not explain the consequences of the loan and/or guarantee in the required manner.
Foyle Legal prides itself on tailoring its advice on loans and guarantees the needs of the client. Foyle Legal is also sensitive to your time restraints and subject to availability may be able to see borrowers or guarantors outside of normal business hours or at your home.
Foyle Legal generally charges $300 for an independent solicitor’s certificate, though the cost may vary depending on the borrower’s or guarantor’s situation and whether advice in writing over and above the certificate is required. Foyle Legal can not provide borrowers or guarantors with financial advice. If this is required Foyle Legal recommends contacting a financial advisor or accountant.
Please note that the following information is provided as general information only. It is not a substitution for legal advice and should not be relied on without obtaining additional legal advice concerning your individual circumstances.
Should you have queries or wish to arrange an appointment contact Foyle Legal for an appointment on 0408727343.