"The Bank Holds the Hammer": Power and Protection under Alberta’s Guarantees Acknowledgment Act

Abstract

In this thesis, I examine the history and purpose of Alberta’s Guarantees Acknowledgment Act (GAA). Through legal history and case analysis, I argue that the GAA contains assumptions about power and vulnerability that do not necessarily align with the practical reality of guarantee transactions. In the first chapter of this thesis, I delve into the origins of the GAA. I argue that, having regard to the historical context of hostility towards lending institutions in Alberta in the 1930s, the GAA is premised on an understanding of guarantee transactions in which the guarantor is vulnerable relative to the lender. I discuss how this power imbalance is not always borne out in practice, and how the lender may in fact find itself the more vulnerable party. In the second chapter, I explore the campaign to reform the GAA in the 1980s in order to provide the guarantor with increased protection. I discuss how the media coverage of this campaign and legislative debate reflected the same understanding of power and vulnerability – in which the guarantor was vulnerable to the lender – as in the 1930s. Finally, in the third chapter, I consider potential issues of power and vulnerability between the guarantor and borrower. I use the phenomenon of relationship debt as a lens through which to explore how the GAA may fail to protect against a guarantor’s vulnerability to the borrower. The GAA contains certain assumptions about who has power and who requires protection in a guarantee transaction. I conclude that these assumptions are not always reflected in real-life transactions and may, in some instances, result in unjust outcomes and gaps in protection.