danger of that, as the state of my own
car would testify) it isn’t legally binding
on me on its own, but it could become
legally enforceable by you if, for example,
you had, on the basis of my promise,
loaned me your caravan for the weekend.
That would be called “Consideration” and
it can make a bare promise into a legally
binding agreement. Or, my promise
might amount to a Representation, and
if I knew when making it that it was false,
it could be a Misrepresentation that may
have induced you into loaning me your
caravan.
In this case, what had the Agent
promised to do? He hadn’t promised the
investment, because that was subject
to the further enquiries that needed
to be made, but he had promised that
he had the funds available if the Due
Diligence proved to be OK. In truth, he
had no such financial backing. It turned
out to be something generally known as
an “Advance Fee Scam” which is a way
that fraudsters get money out of people
on the promise of delivering something
much bigger in return. If you are ever
tempted (and please don’t be) to contact
one of those people claiming to be
African royalty, sending e-mails asking
you to look after their money while they
hide it from a corrupt new regime, , you
will find that they ask you for money to
test the bank transfer system or some
such nonsense. And then they will try
and empty your bank account.
What made this scam succeed with
my client though was the fact that the
Agent had been able to fool a Solicitor
in this country into believing he was
legitimate, hence the reference from
the Solicitor on which my client relied,
and that, in this instance, gave us
an opportunity to recover the money,
not from the fraudster, but from the
Solicitor’s insurers, as the Solicitor had
clearly been careless in not looking more
carefully at what his client was up to.
The Solicitor had not been a part of the
dishonesty.
entirely. Most people are genuine,
honest, and have good intentions. There
will, however, be the odd bad penny, and
the thing is they are difficult to spot in a
handful of change.
In that case, there was a clear intention
to defraud, on the part of the Agent, at
the outset. Sometimes, however, the
reasons why a promise may not be kept
are less obvious. It may be, for example,
that your grandson Tom asks you for a
loan to help him with the deposit on a
house (yes, we are back to the Archers
again). He may have every intention
of repaying it at the time, but 2 years
later, his business fails and he is made
bankrupt. You are now just one more
unsecured creditor that can’t be repaid in
full. Tom can’t choose to pay you before
his other creditors, as that would be
unlawful, and some creditors, such as
HMRC, stand ahead of you in the queue.
The important thing is therefore to get
advice before it’s too late, and get the
advice from a Solicitor, not someone
who once did a Law A-level, because
even though solicitors may not get it right
all of the time (as is evident from the tale
above), we are highly regulated, have
a long standing code of ethics which
we adhere to, and have insurance that
is there to protect our clients on those,
thankfully rare, occasions when even we
haven’t spotted the problem.
There will also, as I have mentioned,
be situations that arise where a person
simply cannot honour their promise,
no matter how ethical they may be or
appear to be.
I promise.
By Chris Randall
Or, Tom may die, leaving his worldly
belongings to charity. His executors
may not be convinced that the money
you handed to him is a loan rather than
a gift. What proof do you have of the
arrangements between you and Tom?
So what lessons can be drawn from all
of this?
Well, don’t lose faith in human nature
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