Contracts are legally binding documents – it’s important whose name is on them!
Taheri v Vitek is a case surrounding the appellant wife and her husband who signed the wife’s name as well as his own as guarantee to buy a block of land in Sydney. The sale never eventuated, and the respondent vendors sued the purchaser as well as the guarantors. In the event of this happening the wife filed an affidavit proclaiming that she did not know that her husband had named her as a guarantee, which would inherently contractually bind her as a result. Before the trial ended the wife settled matters with the vendor and also a claim she herself had brought against her Conveyancer. However, the claim against the husband still proceeded and as a consequence the vendors obtained a judgment against him.
Following the Settlement with the wife and vendors, she filed evidence with the courts giving evidence that she was aware of her obligations as a guarantee under the contract and that she was contractually bound.
There was two hearings held initially, firstly, Bergin CJ, found that the vendors were persuaded to settle given the wife’s fraudulent misrepresentation, and consequently his honour set aside the settlement. Secondly, Rein J, held that she was liable as a guarantee, because of either s163B of the Conveyancing Act 1919 (NSW), or because of estoppels.
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