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Understanding the client need and the implications of their actions

Understanding the client need and the implications of their actions

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Understanding the client need and the implications of their actions

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  1. “Contingent Liability Briefcase” Sanlam Business Market Understanding the client need and the implications of their actions Sanlam Business Market

  2. “Contingent Liability Briefcase” Sanlam Business Market This presentation gives you insight into the implications of the business owner’s decision to sign surety and the implications thereof especially if no surety cover is in place. A contingent liability podcast as well as an intermediary and client article that summarises the essence of this presentation is available in English and Afrikaans and can be downloaded from the Contingent Liability briefcase. Understanding the client need and the implications of their actions Sanlam Business Market

  3. The 1-2-3 of Business

  4. Structuring your business

  5. Getting the business going • Overdraft facility • Lease premises and equipment • Bond premises • Long term loans • Financing of vehicles / machinery / equipment

  6. Please sign surety!

  7. So what have you actually done? 1 2 3 4

  8. The other intricacies of signing surety Bank Signing Surety Business Owner The Surety

  9. The Prinsloo CaseGHPM Boerdery 100 BPK vs Standard Bank North Gauteng High Court

  10. Induced by fraud or misrepresentationSlip Knot Investments v Du Toit 2011

  11. Famous last words

  12. I did not know I signed suretyLangeveldt v Union Finance Holdings The caveat subscriptorprinciple – “general contract law principles dictate that it is presumed that anyone who signs a document has the intention of entering into the agreement contained within that document”

  13. Is your business partner a stranger?

  14. The Ombudsman for Banking ServicesPersonal Finance: Saturday, 5 May 2012 • “His office sees the devastating consequences of suretyships” • “Universal (unlimited) suretyship agreements are often signed by a consumer as a matter of course” • “Entitles the bank to hold him/her liable for any debts of the person for whom they stand surety” • “Banks have not accepted our recommendation that the use of universal (unlimited) surety contracts be scrapped from the Code of banking Practice”

  15. What are the implications if the surety is not covered?

  16. Contingent LiabilityArticle - Danger of signing surety without surety

  17. Contingent LiabilityPodcast

  18. In summary • Avoid signing surety if all possible • Do not sign surety without surety • The implications are severe if the surety is called up • There is no escaping the surety contract • Know your business partner • Review the surety position of your client on a regular basis

  19. The 1-2-3 of Business