Melbourne Law School - Theses

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Start date: 1985 × End date: 1985 × Subject: Victoria × Subject: Consumer credit × Subject: Law and legislation ×

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    Recent developments in the law of consumer guarantees and indemnities
    Bingham, Paul ( 1985)
    A brief examination of the history of the guarantee reveals that equity treated the guarantor as a favoured debtor, given the absence of real benefit to the guarantor. However, these protections have largely been removed by standard form guarantee contracts used by, credit providers, and the law is also otherwise deficient in protecting consumer guarantors. As the expansion of the use of credit in recent years has meant that guarantees are now sometimes given carelessly and thoughtlessly, by persons without adequate education and resources to protect their interests, regulation is required (Chapter 1). The statutory regulation of guarantees before the passing of the Credit Act was inadequate. After examining the scope and nature of the Credit Act, the effect of the Credit Act on the regulation of guarantees is examined (Chapter 2). The extent to which the common law and statute law regulate pre-contractual information given to guarantors is then examined. It is concluded that room for improvement exists (Chapter 3). The extent to which the common law and statute law regulate the exercise of undue influence, unfair pressure and the making of unconscionable bargains is then examined and it is concluded that developments will occur rapidly in this area (Chapter 4). Common law and statutory provisions which discharge the guarantor from liability are then examined in the light of the operation of the Credit Act and it is concluded that some flaws exist both in principle and in the operation of the law (Chapter 5). The extent to which the guarantor is entitled to control the appropriation of payments made by the debtor, and the extent to which the guarantor's liability is coextensive with that of the debtor is then examined and some changes suggested (Chapter 6). The guarantor's rights to have action taken first against the debtor and the debtor's assets, the guarantor's rights to notice before action, and the right of indemnification after action, are then examined (Chapter 7). The possible reasons for the non-regulation of guarantees are examined and dismissed; past suggestions for reform and possible future reforms are examined (Chapter 8). Standard form contracts of guarantee are discussed and the text of a draft fair, simple English, standard form guarantee is suggested (Chapter 9). The law is as stated at 30 November, 1985.