Case in the news this week:
http://www.abc.net.au/news/2018-05-21/pensioner-eviction-guarantor-loan-westpac-banking-commission/9784426?section=business
Summary:
Carolyn Flanagan cannot read or write, but used her home to guarantee daughter’s business loan through Westpac.
Increasingly, organisations are requiring solicitors to provide advice to the other party in a transaction. Commonly this is banks instructing a guarantor to get advice to perhaps not do like Ms Flanagan, but also franchisors need to ensure that a franchisee understands the nature and effect of the franchise agreement, people selling a business subject to regulations want to ensure the other party understands it.
Ensuring each party understands the consequences of what they are entering, particularly if a party has some personal interest in the contract, transfers the liability from the lender/franchisor/stronger party, it ensures finality of contract, and avoids litigation and damage to reputations.
