Question
Jerry Tom wanted to open his own convenience store, Mom & Pop Inc. The bank agreed to give him a loan of $100,000.00 to get
Jerry Tom wanted to open his own convenience store, "Mom & Pop Inc." The bank agreed to give him a loan of $100,000.00 to get the business off the ground. Jerry wanted to borrow the money in the name of his business, "Mom & Pop Inc." so that he would not be personally liable if the business failed - he had a wife and four children to think about. When Jerry went in to sign the papers for the loan, the bank's financial officer, Donna Power, told Jerry that to get the money he had to sign a personal guarantee, "but don't worry. It's really just a formality. Once you get some inventory that you can use as collateral, we will void this agreement." Jerry reluctantly signed. Jerry's business failed, and now the bank is suing Jerry for $100,000.00 on the basis of the personal guarantee he signed. Jerry wants to argue that he should not be held to the written agreement because Donna told him that it was just a formality that they were going to void. The bank argues that any evidence regarding what Jerry and Donna may have talked about is inadmissible under the parol evidence rule. What arguments could you make on Jerry's behalf? Will the bank be successful?
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