Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ram has worked as a successful accountant for several years since graduating with the Master of Professional Accounting from Charles Darwin University. He is 32

Ram has worked as a successful accountant for several years since graduating with the Master of Professional Accounting from Charles Darwin University. He is 32 years old and is looking to start his own accounting practice in Parap, Northern Territory. He has saved up a substantial amount of capital. However, he will still need to borrow $25,000 to finalise the arrangements. He has no assets and cannot obtain a loan without a guarantor. Ram consults his elderly parents, who grew up in Australia. He tells them he has a fantastic idea and that he needs their help. Ram's parents have always been very proud of him and think his plans are fantastic. Ram tells his parents he needs only $25,000 and this will be repaid within 6 months, after which time they would be under no further liability. Arrangements are made for a bank manager to visit Ram's parents and they both sign as guarantor for Ram. However, the agreement they sign is one for an infinite credit limit over an unlimited period.

Ram's parents do not have $25,000 readily available to repay the loan and they fear losing their family home. They seek their advice. In your answer, consider the case of Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Law Express Employment Law

Authors: David Cabrelli

7th Edition

1292295252, 978-1292295251

More Books

Students also viewed these Law questions

Question

Why are supply chains complex to manage?

Answered: 1 week ago

Question

1. What do I want to achieve?

Answered: 1 week ago

Question

3. What is my goal?

Answered: 1 week ago