Contract law problem question Essay Example | Topics and Well Written Essays - 2000 words

Contract law problem question - Essay Example esented we find that, subject to certain reservations, there are areas and actions taken before and within the original arrangement, which could enable Jack to defeat the banks proposed action. Is it possible for a person who offers his property, as securities to a bank against funds lent to a third party, escape the consequences of that contract should the repayments not be met? And under what circumstances it is possible that a joint and several liability clauses not be enforceable? These questions have been the subject of a number of court cases over the past few years and the judgment in some cases conclude that if certain conditions and actions were not taken prior to the signature of the contract, it is possible to successfully defend any breach. The task of this document is to ascertain which of these circumstances could be relevant to Jack in defending himself against a claim by the bank for repossession of his property so that they can reclaim some of the monies owed to them. The facts of the case are that Karen’s import-export business had been experiencing cash flow difficulties and financial problems for some time, at least fifteen months with no improvement. Her bank had refused to assist her with an increased overdraft facility had been informed by her bank that they would not extend her business’s overdraft unless extra security is provided. Karen explained the situation to her employee of five years, Jack, who had also become a friend of the family and suggested that he find another job. Under the impression that the problem was temporary, Jack suggested that she use his flat, an inheritance from his aunt, as security against further borrowings. The flat at that time was worth  £250,000. After consideration Karen took Jack up on his offer and informed him that it would also secure his job and that it was only a temporary situation that would soon be corrected. They went to the bank. The bank advised Jack to seek independent advice and