What is the test for determining whether a person intended to enter into a binding guarantee obligation?
British Columbia, Canada
The following excerpt is from Business Development Bank of Canada v. E & B Construction Ltd., 1999 CanLII 6338 (BC SC):
To determine whether a person intended to enter into a binding guarantee obligation, the court will objectively examine the manner in which that person conducted himself or herself. As stated by Blackburn J. in Smith v. Hughes, [1861‑73] All E.R. Rep. 632 (D.C.): If whatever a man's real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and the other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he intended to agree to the other party's terms.
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