The K.I.S.S. Principle Revisted

A friend of mine just presented me with an entertaining example of legalese gone mad. Alan Siegel is right!

In March 1986 the Australian Choice magazine published its Gobbledegook Award winner for the year. The winner entry was submitted by my friend's mother after my friend took out a loan to buy a car. The loan contract included the following one sentence of 451 words!

"The Credit Union shall have the fullest liberty without affecting this guarantee or indemnity to grant time to the Borrower for payment of the Principal sum and interest thereon or for payment of any installment of the Principal Sum and/or interest or to grant to the Borrower any other indulgence or make any arrangement whatever with the Borrower as to the receipt of a composition on the claim of the Credit Union or to release or part with any security which the Credit Union may hold or any part of or interest in the same or to postpone the priority of any security created or at any time and from time to time hereafter created by the Borrower in favour of the Credit Union in relation to any other security created or at any time and from time to time hereafter created by the Borrower in favour of any other person or corporation or to take or to refrain from taking from the Borrower any security for payment of the Principal Sum and interest thereon and to postpone for any time or from time to time the exercise of any power of sale contained in any security given by the Borrower to the Credit Union or any other power therein contained or the exercise of any power conferred on the Credit Union by the Loan Contract and to exercise the same at any time and from time to time and in any manner and either to enforce or forbear to enforce the covenants and agreements for payment of principal or interest or any other covenants or agreements for payment of principal or interest or any other covenants or agreements contained or implied or referred to in the Loan Contract or any other remedies or securities available to the credit Union and the Guarantor shall not be released or the liability of the Guarantor in any way reduced by an exercise by the Credit Union of its liberty with reference to the matters aforesaid or any of them or by time or any indulgence being given to the Borrower or by any variation in the provisions of the Loan Contract or the omission to take perfect or enforce any security given by the Borrower to the Credit Union in respect thereof or any invalidity therein or by the giving by the Credit Union of any consent to the Borrower mortgaging or charging all or any of the assets of the Borrower in favour of any company or person of by any other thing whatsoever which under the law relating to sureties would but for this provision have the effect of so releasing or reducing in any way the liability of the Guarantor."

Which, from my understanding, actually means that:

If you are guarantor, Credit Union can require you to make full or part payment of the outstanding amount, as long as there is money still owing, and without going to the borrower first, no matter what the borrower does.

Does that make sense? It was only 40 words – or less than 10% of the original. Hmmmmm….
 
I did do a quick search to see what Credit Union has in its current terms and conditions, but their website said that you actually had to complete an application form for a loan before they would give you that information, and I don't want to borrow money.

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2 Responses to “The K.I.S.S. Principle Revisted”

  1. Deann August 16, 2010 at 10:24 pm #

    Thanks for this interesting blog, even if it did take quite a long time to complete reading. (English is not my national tongue) Can I ask where you got your sources from? Thank you! Deann

    • Jeanette Jifkins August 18, 2010 at 8:22 pm #

      Hi Deann,
      As a first point of call, if I am looking up legislation or caselaw I try the international Legal Information Institutes – Austlii, Canlii, Comlii etc. From there I always use government legislation and department websites as the main point of call. It would be impossible to keep up to date with everything that is happening, so I subscribe to a couple of online international legal journals and blogs as well. A lot of the current e-commerce and internet law cases come from those journals – usually reported by the people involved in the cases as they went to court.
      Jeanette

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