1
Q
Smith v Bank of Scotland
A
Rule: Where undue influence or misrepresentation is likely, bank must warn the cautioner.
Hook: Mrs Smith signed because she trusted hubby — bank should have stepped in.
2
Q
Royal Bank of Scotland v Ranken
A
Rule: If the bank misleads the guarantor, guarantee may be void.
Hook: Ranken was “rank” at lies — bank misled him about borrower’s risk.
3
Q
Young v Clydesdale Bank
A
A wife guaranteed her husband’s business debts and later alleged undue influence. The court held the bank was not liable, as there was no duty on the bank to investigate or warn in the absence of notice of impropriety.
4
Q
Swan v Bank of Scotland
A
Rule: If the underlying contract is void, the guarantee may also be void.
