An elderly Greek couple, Mr and Mrs Kyrgios, with little understanding of written English or formal education, signed a guarantee and mortgage over a block of shops to the
Commercial Bank at security for payment of the debts of their son's company. Their son was a property developer and builder At the time of signing, they were led to believe by their son that the guarantee and mortgage were up to $50,000 and limited to six months. They were also told by their son that the
company was in good financial condition
when in fact, it was in serious financial
trouble.

When the bank manager brought the papers to Mr and Mrs Krygios's home for them to sign the mortgage and guarantee, he corrected their misunderstanding about the length of time the guarantee was to run far, explaining that it was for an unlimited time and not six months. However, he didn't explain the possible effects of the documents, which Krygios could not read, and he did not mention the fact that the amount guaranteed was unlimited. When the son's company went into liquidation and the bank attempted to exercise its rights under the mortgage/guarantee, the Krygios's attempted to have the contract set aside.

Required:

Do the Kyrgios's have any claim against the Bank under the Australian Consumer Law? If yes, under what basis can they claim?

Answer rating: 100% (QA)

Yes the Kyrgioss may have a claim against the Bank under the Australian Consumer Law ACL on several grounds Firstly the Bank may have engaged in misle... View the full answer