Nelly6978
Nelly6978
29.03.2020 • 
Business

On May 17, 2000, David Holmes met with Clarence Burleson, a loan officer with the Bank of Milligan, to discuss borrowing $5,000 from the bank to start a new business. After learning that he did not qualify for the loan because of his weak financial condition, Holmes told Burleson that his former employers, the Clarks, would guarantee payment of the loan. Burleson called the Clarks who orally stated on the telephone that they would personally guarantee the loan to Holmes. Relying on this guaranty, the bank loaned Holmes the $5,000. The bank sent a written guarantee to the Clarks for their signatures, but it was never returned to the bank. When Holmes defaulted on the loan, the bank filed suit against the Clarks to recover on the guaranty contract. The bank’s pleadings contain two arguments: 1) an enforceable express contract existed between the bank and the Clarks; and in the alternative 2) a quasi (implied-in-law) contract should be imposed to prevent unjust enrichment.
Using the IRAC method, discuss whether there was a contract as the bank claims and whether the Clarks are liable.

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