John Case Study - Business Grow and Expand - Accounting and Finance Assignment Help

Assignment Task:

Answer the three questions at the end of this Case Study Scenario. 

John is an Accountant. He wants to borrow a loan of $50,000 from his Bank, to help his  business grow and expand. 

SUNNY, the Manager of "SUNNY-LAND BANK" goes with John to visit Roberto - who is  John's Grandfather. At the house, Sunny realises that Roberto is a frail, elderly man who  has very poor English. 

He is shown a document but is unable to read or understand its meaning. Sunny watches  John trying to persuade Roberto to help him borrow money from the Sunny-Land Bank. 

John tells Roberto that he will be employing more staff to help cope with his growing  business. 

Sunny sees that Roberto appears confused and unable to understand what John is talking  about. He notices that Roberto in fact, appears to be quite tired and dizzy. 

Roberto asks what it is, that he is signing. John says it's just some standard papers, and  nothing to worry about. Sunny remains silent. 

After about an hour, John finally convinces his reluctant Grandfather Roberto to sign  the Bank document. 

John also convinces Roberto to make a personal loan to him of $10,000 - on the condition  John will repay the loan within 6 months. 

Roberto signs the documents - only so that he can finish the meeting - and get some  sleep. 

Sunny has signed as a witness to Roberto's signature - both on the "Bank Document", and  on the 'Personal Loan Document'

John then receives the $50,000 Loan from the Bank. Roberto also gives to John a  personal loan for $10,000. 

In fact, the Bank Documents were a "Contract of Guarantee", whereby Roberto agreed to  be the Guarantor for John's Bank Loan. Roberto had agreed that the Bank could place a  Mortgage on his house for Security. 

Six months later, due to the recession, John stops making loan repayments to the Bank.  Roberto refuses to pay anything to the bank. The Bank has now commenced a legal action  against Roberto for Breach of the Contract of Guarantee. The Bank is threatening to sell  Roberto's house, to recover the debt. 

John is not at all concerned and refuses to help save his Grandfather's house. He also  refuses to repay the $10,000 loan-saying there was no contract - only an unenforceable  family agreement. 

QUESTIONS: 

A. Explain and discuss, Roberto's possible Defences and Remedies against the  Sunny-Land Bank's Legal Action, in accordance with the ‘Amadio Case’. 

B. What steps should the Bank Manager Sunny have taken to help avoid Roberto's  possible Defence, under the principles of the ‘Amadio Case’.  

C. Explain and discuss, whether Roberto has a valid and enforceable Contract with  John. What are Roberto's rights and remedies against John, regarding the  Personal Loan?  

D. Does the Assignment demonstrate critical reflection and insightful analysis, with  correct spelling and grammar throughout? (2 Marks) Have the Sources been  correctly referenced with ‘In-Text Referencing' and 'Reference List'? (4 Marks)

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