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Sins of the father: can a guarantor avoid liability by claiming to have been under “undue influence” of a family member?
In an important case, in which WFW acted for the successful claimant lenders, the Commercial Court has comprehensively rejected arguments advanced by two sons of a shipping magnate – who, together with their father, had given the claimants a number of personal guarantees of a series of shipping loans – that (i) they had acted under their father’s undue influence; and (ii) the claimants had been put on inquiry of this. In giving judgment, the judge reviewed the authorities and helpfully clarified a number of aspects of the law of undue influence, which will be of interest both to legal practitioners advising on personal guarantees and related security and to lenders seeking to obtain such security.
YS GM Marfin II LLC & Ors v Lakhani & Ors [2020] EWHC 2629 (Comm)
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