The younger Mr. Gill was fluent in English and a sophisticated businessperson. He had worked in a credit union for a number of years and had managed his father’s berry farm. To take advantage of a business opportunity, he arranged with the Royal Bank to borrow $87,000. During the negotiations, it became clear that he could get a more favorable rate of interest if his father guaranteed the loan. In fact, the son had done a considerable amount of banking on behalf of his father, who was a customer at the same bank. The elder Gill could not read, write or speak English and relied on his son in all his business dealings. The documents were prepared and the son brought his father to the bank to sign them. At no time did he explain to his father that he would be signing a personal guarantee and the evidence was clear that the father had no idea what he was signing other than that it was a document associated with a loan transaction. Gill Sr. had implicit faith in his son’s handling of business affairs. Gill Jr., on the other hand, was so excited about the deal that he apparently never explained the nature of the documents to his father. It is clear in this situation that at no time was there any misrepresentation to the father or the son on the part of the bank. When the son defaulted on the loan, the bank turned to the father for payment.Should Gill Sr. be held responsible for this debt? What precautions should the bank have taken? Identify the best arguments for the father. What arguments should the bank advance?
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