Like the doctrines of misrepresentation, misleading or
deceptive conduct, and undue influence, the taking of
unfair advantage or unconscionable conduct may be
relevant to the problem of bank guarantees being entered
into without adequate understanding or consent. A
guarantee or surety of this kind is, incidentally, a contract
in which one party (the guarantor) promises another (the
lender bank) to meet the debt obligation of a third party
(the borrower) should the borrower fail to do so.
Typically, a guarantee involves the guarantor accepting
a liability in a contractual relationship which appears, on
the face of it, to be improvident as the guarantor derives
not tangible benefits from it by way of a claim against
the creditor or the principal debtor.