Mr Lord acquired two motor coaches under two hire-purchase agreements from the claimants and persuaded his mother-in-law to guarantee his obligations by a contract indorsed on the agreements in the following terms:- ‘We . . guarantee the due and punctual payment by the . . hirer of all . . moneys payable by him under the within written agreement . . and we further agree that this guarantee shall not be avoided . . by the owners and the hirer making any variation in the terms of the said agreement . . provided that no variation shall make us liable for a greater maximum sum under this guarantee than that for which we are at present or may become liable under the present terms of the said agreement.’ Mr Lord fell into arrears and the claimant, instead of resuming possession, made a new single agreement with him by which the two earlier agreements were consolidated and the vehicles were regarded as being hired together so that Mr Lord could not acquire property in any one vehicle unless he paid all instalments due on both vehicles.
Held: The Court described the clause permitting variation to be:- ‘so wide that it was almost impossible to put any limit to the power to vary.’ and added:- ‘It might be that the position of the debtor was so altered that he would be less able to repay the guarantor, but even such a change was not beyond the very wide power of variation contained in the guarantee.’
Judges:
Branson J
Citations:
(1934) 50 TLR 230
Cited by:
Cited – Triodos Bank Nv v Dobbs (No 2) CA 24-May-2005
The bank sought payment under a guarantee given by the appellant. The appellant said that the original loan agreement had been varied so as to release him. The loan had been taken out to support a business venture. After the guarantee was signed a . .
Lists of cited by and citing cases may be incomplete.
Contract, Banking
Updated: 30 April 2022; Ref: scu.225453
