An elderly Italian couple, with little understanding of written English or formal education, signed a guarantee and mortgage over a block of shops to the commercial Bank as security for payment of debts of one of their son’s companies. 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 for up to 50,000 and limited to six months. They were also told by their son that the company was in good financial situation, when in fact it was in serious financial trouble. When the bank manager brought the papers to their home for the Amadio to sign the mortgage and guarantee, he corrected their misunderstanding about the length of time the guarantee was to run for, explaining that it was for an unlimited time and not six months. However, he didn’t explain the possible effects of the documents, which the Amadio could not read, and he made no mention of the fact that the amount was unlimited. When the son’s company went into liquidation and the bank attempted to exercise its right under the mortgage/guarantee, the Amadio attempted to have the contract set aside.

Issue: was the conduct of the bank such that it could be regarded as unconscionable? That is, had the bank taken unfair advantage of its superior bargaining position for its own commercial gain? Special Disadvantage

Competition and consumer rights 2010 & Australian Consumer Law S21 ACL

• Give advice to the person under the common Law
• Give advice to the person under the Statute Law