Case in the news this week:


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.