Question 1 (20 points) Johnie Walker is a local business person. Johnie contacted Mega Bank to take out a loan. Mega Bank indicated that they would only make the loan if Johnie could obtain a guarantor. The following day Johnie spoke with his father Jack, who agreed to assist Johnie in his business venture. An appointment was made for both Johnie and Jack to meet with the lending office on the following day. At the lending office the Mega Bank employee placed the guarantee forms in front of Jack and pointed out where he needed to sign. Jack, in his very poor English, asked what the guarantee meant. The lending officer and Johnie gave Jack a very brief explanation and told him that he had nothing to be concerned about. Jack signed the bank guarantee and the $300,000 was deposited in Johnie's account the following day. Eight months later Johnie's business venture was in ruins and he was unable to make any payments on the loan. Mega Bank called upon Jack to pay out the amount outstanding. Jack was unable to do so and Mega Bank have threatened to sell his home. Jack has approached you seeking advice on the possibility of having the bank guarantee terminated. Required: A) Using IRAC, advise Jack whether he is liable to pay the outstanding balance. When answering this 20 point question, 5 points will be allocated for your use of IRAC and the remaining 15 points will be awarded on your advice which should include case and legislative references