Question
Tyrell operates a menswear shop in Charlottetown, Prince Edward Island.The Covid-19 pandemic has resulted in him having to shutter his business temporarily.In the meantime, however,
Tyrell operates a menswear shop in Charlottetown, Prince Edward Island.The Covid-19 pandemic has resulted in him having to shutter his business temporarily.In the meantime, however, he is still required to pay his business expenses.Tyrell has applied to Scotiabank for a business emergency loan to help him through this downturn. Before it will grant a business emergency loan to Tyrell, Scotiabank requires certain security, including a Guarantee from an independent person that Scotiabank will review.
Tyrell is aware that his father has significant liquid assets.His father is 89 years old, wealthy, but of ill health.Though his father still lives at home, his eyesight is poor and cannot read, and there are concerns that he may be suffering early effects of dementia, as he often appears confused and forgetful.
Tyrell tells his father that he is applying for a loan for his business, and that he is signing some standard paper work for the loan.Knowing that his father is not about to willingly give him cash to support his business, and that his father will not agree to guarantee the business, Tyrell instead tells his father that he needs him to sign a letter of reference in order to help Tyrell get the business emergency loan.
Tyrell does not tell his father the true nature of the Guarantee; only that it is a letter of reference to help to assist with the loan process.Tyrell does not read the Guarantee to his father; he simply points to where he wants his father to sign the Guarantee.
Discuss whether the Guarantee is an enforceable contract.What might Scotiabank do to ensure enforceability of the Guarantee?
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