Coffee and a Case Note
Coffee and a Case Note
James d'Apice
Abod v Kingston Finance [2019] NSWSC 242
4 minutes Posted Jun 4, 2019 at 12:14 pm.
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So, when is your loan agreement void for uncertainty?  When are a contract's terms so vague that the Court can't find any real agreement between the parties?  The NSW Supreme Court  considered a loan agreement obliging the borrower to pay interest "at such times, for such periods and at such rate or rates as shall be determined by the lender from time to time": [6].  Generally, when confronted with a knotty term, Courts the Court will try to preserve the contract if possible: [9].  The term above put the "times" and "periods" when interest was to be paid - as well as the rate itself - completely in the control of the lender.  Seemingly: there's no interest unless the lender says so!  Despite this obscurity, the Court found (bearing in mind the agreement related to unsecured loans in a family trust context) the term was sufficiently certain to be enforceable: [14].  In coming to that conclusion the Court - in my respectful view, wisely - noted the likelihood that parties to a contract of this sort might "sit down with (their) accountant" to work out the interest payments on the basis of reasonableness.  We find, perhaps as always: accountants to the rescue!


Hope you get some value from this episode!