Question 1

Mr. and Mrs. Lee provide a guarantee to a bank over a loan for a motor vehicle purchased by their son Lim. Lim subsequently defaults on his repayments and the bank seeks to enforce the guarantee against his parents. At the time the guarantee was entered into, neither parent had a good grasp of the English language, both were elderly and they received no independent legal advice. Mr. and Mrs. Lee believed that the extent of their liability was far more limited than it was. Upon what grounds could it be argued that reality of consent is missing from the guarantee agreement? What would be the likely status of the agreement?

Question 2

Critically analysis the following scenario and advise Belinda whether she has an action against the ferry company for the loss of her car.

Belinda, who resides in Melbourne, decided to take her family to Hobart. Arriving at the ferry (which she has often used before), she is given a ticket on paying her fare and the fare of her three children. On the reverse side is written:

"All vehicles and passengers use this ferry at their own risk"

She does not read these words nor does she see the notice on the ferry itself that has identical wording. Due to negligent navigation by its captain, the ferry collides with an underwater obstruction marked by a warning buoy. The ferry sinks slowly enough for all the passengers and crew to be rescued but the ferry and vehicles on it are lost.