Vance, an elderly pensioner, agrees to help his son Lance overcome a cash flow problem that Lance's business is experiencing. Vance says he will execute a mortgage over his home in Collaroy in order to secure what Lance tells him is a short-term loan of $100,000 from MegaBank Ltd to Moe Pty Ltd, Lance's private company. The Collaroy house is Vance's only significant asset.

Lance brings the mortgage papers from the bank to Vance's home and Vance signs them in front of his next-door neighbour Joe, who witnesses the signature. However, the mortgage signed by Vance secures all outstanding debts owed by Moe Pty Ltd to MegaBank. At no stage does Vance receive any professional advice about the loan. Nor is he aware of all of its terms, one of which gives MegaBank the right to sell Vance's home in case Moe Pty Ltd defaults on the loan.

Lance's business fails after six months because of rapidly falling consumer demand and a sharp rise in interest rates. Vance comes to you for advice. Advise Vance of the following:

a)Describe one cause of action Vance could raise to have the contract rescinded under the general law? [13 marks]

b)Describe one cause of action Vance could raise to have the contract rescinded under the Australian Consumer Law. [12 marks]