Scenario A bank forecloses and sells the property. The guarantors are sued by the bank for balance monies owed. The guarantors claim that the bank sold the property at an under value and counterclaim against the bank. Guarantors are usually left with little or no remedy against a bank who sues the guarantor for monies owed by the borrower. Disputes by a guarantor that receivers appointed by a bank have failed to take reasonable care to sell the property for market value or the best price reasonably obtainable are common. “No Set-Off Clauses” Banks cover themselves by including clauses in their contracts with borrowers and guarantors that prevent a guarantor from setting off any counterclaim
The New Unfair Contract Laws came into effect from 12 November 2016. The amended Australian Consumer Law changes contract law as we know it. In a Nutshell Simply put, a contract term may be declared void if: The contract is a standard form small business contract for the supply of goods and services or the sale or grant of an interest in land; the upfront price is less than $300,000 including GST or $1 million if the term is more than 12 months; and the term is unfair. The law will affect all manner of commercial contracts including: Commercial Leases; Franchise Agreements; Off the Plan Contracts; and Financial agreements, loan agreements and, mortgage documents Examples of Potentially Unfai
