Andrews v Racken [2007] NSWSC 1010

In this case the court determined that the Borrower in position analogous to that of surety because the loan advance was not going to him but to a third party. The court determined the contract was unjust because the terms were not explained and the borrower did not understand nature of obligations assumed. Thus the court seems to have imported the very restrictive Yerkey v Jones principal to burden all lenders with a duty to explain documents to borrowers. The court determined that the loan was not unconscionable under the general law. The court noted the purpose of the remedy under Contracts Review Act is to avoid unjust consequence or result and so the borrower was merely held to substance of transaction as he understood it to be.

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