The Queensland Court of Appeal has upheld a personal guarantee given by a woman (the appellant) to a bank to secure a loan to a company that she claimed was controlled by her husband.  The Court rejected the appellant's claims that she did not understand the nature and effect of the transaction or that she was at a special disadvantage in all of the circumstances. 

The appellant had a history of property ownership, and had given two previous guarantees to the bank.  The Court held that the bank was entitled to explain the consequences of the guarantee in general terms, and was not required to list every possible consequence of the transaction (like bankruptcy).  Here, it was material that the appellant knew her properties were "on the line" and sale of them was "a worst case scenario".  Ultimately the creditor must have "reasonable grounds for believing that [the] party does have an adequate understanding of the nature and purport of the transaction".

The Court left open whether the appellant qualified as a volunteer in the transaction.

See Court decision here.