LPC Law Notes Finance and Capital Markets Notes
A collection of the best Capital Markets and Loans* notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".
In short, these are what we believe to be the strongest set of Capital Markets and Loans notes available in the UK this year. This collection is...
The following is a more accessible plain text extract of the PDF sample above, taken from our Finance and Capital Markets Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Challenging a Guarantee
Is it written?
4 Statute of Frauds 1677 in order to be enforceable, a guarantee must be both
In writing
Signed by the guarantor or a person authorised by the guarantor
Has there been a variation to the primary obligation?
If there is a variation to the primary obligation between the bank and the borrower, without the consent of a guarantor, a guarantee agreement, as the secondary obligation, will no longer be valid
Check the guarantee agreement to see if there is a ‘waiver of defences’ clause which will allow a bank to alter the primary obligation whilst ensure the guarantee agreement is not discharged
Is there consideration?
Guarantees are contracts and must therefore contain consideration as a basic contract requirements
Where a guarantee is executed as a deed there will be no argument about whether good consideration has been given
If a guarantee is executed as a deed the guarantor will be bound from the date on which the deed is delivered
Is the guarantor insolvent?
If a guarantor becomes insolvent the guarantee could be sent aside as
239 CA 2006 A transaction at an undervalue
Guarantor insolvent at the time of giving the guarantee or become so as a result
Guarantee given within 2 years before the onset of insolvency
Value that the guarantor receives as a result of giving the guarantee is significantly less than the value it has given to the lender
238 CA 2006 A preference
Guarantee given within either 2 years or 6 months before the onset of insolvency depending on whether there is a connected person
Guarantor insolvent at the time of giving the guarantee or become so as a result
Guarantee puts the recipient into a position which is better than the position he would have been in if the guarantee had not been given
Is there unlawful financial assistance?
It is unlawful for a public company whose shares are being, or have been acquired, to give financial assistance directly or indirectly for the purpose of that acquisition unless certain exceptions apply
Financial assistance includes the provision of guarantees, security or indemnities
Is there corporate benefit?
Directors must show that they are acting to further the objects of the company and that there is no abuse of power caused by acting with an improper purpose in mind
173 CA 2006 Duty of directors to exercise independent judgment
174 CA 2006 Duty of directors to exercise reasonable care and skill
172 CA 2006 A director must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole. Directors should consider:
The likely consequences of any decision in the long-term
The interests of the company’s employees
The need to foster the company’s business relationships with suppliers, customers and others
The impact of the company’s operations in the community and the environment
The desirability of the company maintaining a reputation for high standards of business conduct
The need to act fairly as between members of the company
Downstream Guarantee (parent guaranteeing a loan one of its subsidiaries is taking)
There will be corporate benefit to the parent as its subsidiary is looking to further its development that will ultimately lead to greater profits for the...
Buy the full version of these notes or essay plans and more in our Finance and Capital Markets Notes.
A collection of the best Capital Markets and Loans* notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".
In short, these are what we believe to be the strongest set of Capital Markets and Loans notes available in the UK this year. This collection is...
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