Wife-Sureties, Non-Commercial Sureties and the O'Brien-Etridge Principles: The Hong Kong Position

Abstract

On the subject of a bank's responsibility for the misconduct of the debtor in inducing the surety to give a guarantee or mortgage, the landmark House of Lords decisions in Barclays Bank v O'Brien and Royal Bank of Scotland v Etridge (No 2) have radically altered the law, and put in place a complex and controversial framework of principles and rules. This article examines the recent Hong Kong cases and the extent to which these principles have been discussed and applied in the Hong Kong courts, and considers some of the difficult issues to which the application of these principles gives rise.