Guarantees—key cases
Guarantees—key cases

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Guarantees—key cases
  • Key cases relating to the characteristics of guarantees
  • Key cases relating to the formalities required to create a guarantee
  • Key cases relating to undue influence when taking a guarantee from an individual
  • Key cases relating to guarantor rights
  • Key cases relating to guarantor protections and varying the underlying transaction
  • Key cases relating to the rights and obligations of co-guarantors
  • Key cases relating to the discharge or release of a guarantee

This Practice Note sets out certain key cases and associated relevant content in relation to guarantees. The cases are divided by topic area and include:

  1. cases relating to the characteristics of guarantees

  2. cases relating to the formalities required to create a guarantee

  3. cases relating to undue influence when taking a guarantee from an individual

  4. cases relating to guarantor rights

  5. cases relating to guarantor protections and varying the underlying transaction

  6. cases relating to the rights and obligations of co-guarantors, and

  7. cases relating to the discharge or release of a guarantee

Key cases relating to the characteristics of guarantees

Names of PartiesJudgment DateCase SummaryRelevant content
Moschi v Lep Air [1972] 2 All ER 39326 April 1972This is the key case setting out the secondary nature of guarantees. The liability of a guarantor is a secondary obligation which is contingent on the principal failing to perform the obligations which have been guaranteed.See Practice Note: Guarantees—Characteristics of guarantees
Yeoman Credit v Latter [1961] 2 All ER 29424 March 1961This case sets out the primary nature of the obligations under an indemnity. The principle of co-extensiveness does not apply to indemnities—an indemnifier will remain liable under an indemnity in relation to a loss under a contract even if the underlying contract is void or unenforceable. It is for this reason that lenders

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