Scott v Briggs

In *Scott v Briggs*, the New South Wales Court of Appeal considered a dispute between the appellant, Scott, and the respondent, Briggs, concerning the enforceability of a guarantee. The primary issue revolved around whether Briggs had validly revoked his guarantee before the debt was incurred by the principal debtor.

The Court was required to determine whether Briggs' purported revocation of his guarantee was effective in releasing him from his obligations. This involved an examination of the principles governing the revocation of continuing guarantees, particularly in circumstances where the creditor had not provided notice of the principal debtor's default.

The Court held that a continuing guarantee, which is an offer to guarantee future debts, can be revoked by the guarantor at any time before the guaranteed debt is incurred, provided that notice of revocation is given to the creditor. In this instance, Briggs had provided notice of his intention to revoke the guarantee to the bank, which was the creditor. The Court found that this notice was sufficient to bring the offer to an end, and therefore, Briggs was not liable for debts incurred by the principal debtor after the date of revocation. The legal principle applied was that a continuing guarantee is an offer that can be accepted by the creditor's continuing to act on the faith of it, and this offer can be withdrawn by the guarantor before acceptance.

The appeal was allowed, and the orders of the lower court were set aside.