Undue Influence and Bank Guarantees

Abstract

This article addresses the approach of the law of equity to the problem of third party undue influence in the context of bank guarantees. It considers the decision of the Irish High Court in Ulster Bank v Fitzgerald and its relationship to the approach of English law, as represented by Barclays Bank v O'Brien [1994] 1 AC 180 and Royal Bank of Scotland v Etridge [2002] 2 AC 773. This involves a discussion of the doctrine of constructive notice as it has been interpreted in those decisions. By way of conclusion, the article considers the future of Irish law in this area.

Keywords: Undue Influence, Equity, Bank guarantees, banking law, third parties, constructive notice, Etridge, Irish law, Law of Contract

JEL Classification: K00, K1, K10, K11, K12, K19, K2, K20, K29, K3, K30, K36, K39, K4, K40, K49