Quote:
Originally Posted by Tower
Blah blah blah
|
Something tells me I shouldn't bother replying but...
The Guarantees Acknowledgement Act has no application to this discussion. It's a short piece of pain in the ass legislation that applies to guarantees only. If you get a loan from the bank for your business but they insist on you personally guaranteeing that loan, then you need to appear before a Notary and get a certificate issued under that act. The Notary, or in many cases the lawyer, must be of the opinion that the person signing the guarantee understands it. Guarantees are often accompanied by half a dozen pages of dense type that rarely coincides with what the person was told by the bank. Many times the person was told that they need to sign the guarantee in case the company can't meet its obligations when really the terms of the guarantee specify that the lender can go after the individual's assets without exhausting all remedies against the company.
Explaining all of this to an experienced and savvy business person is a pain in the ass because they probably get it and see the whole process as a giant inconvenience. Explaining it to an unsophisticated person who doesn't have a lot of business experience is even more of a pain in the ass for obvious reasons. If something goes south with this loan arrangement, especially if the lender is suddenly seeking to enforce the guarantee against the individual, there is a fantastic chance that part of the defence is going to be that the person did not understand the nature of his act by entering into the guarantee. And why not: lawyers have insurance, they have deep pockets.
So for all of this pain in the ass and all of the potential liability, I can understand why many lawyers are reluctant to take on the role of a notary especially for things like Guarantees. And the kicker? According to s. 6 of the Guarantees Acknowledgement Act the maximum fee for issuing the certificate is $5. I know many lawyers who will charge $5 for the certificate but a lot more for the accompanying legal advice but I'm not sure that would stand up if ever challenged.
I notarized a lot of things as an articling student that I really wish I wouldn't have...