Legal Question in Banking Law in Zambia

Jelita is a young entrepreneur who has successfully set up an international company headquarters in the Kenya. She has just opened a subsidiary branch in Zambia since the company is new it is in need of capital which the parent company is not able to provide due to the world economic downturn. Jane therefore approaches a local bank which is amenable to giving the business a loan provided the parent company gives a letter of comfort to the bank. The bank has just received the letter of comfort which says " we are not surprised by the amount of the loan request and it appears good for purpose." The bank goes ahead to issue the loan and six months later due to recession the company fails to meets the monthly repayments on the loan. The banks credit recovers department commences an action to recover the loan from the company headquarters on the basis of the letter to comfort. Meanwhile Jelita's husband who is on two year separation with Jelita and live in Namibia has stopped paying maintenance because he says Jane does not need money. Jelita's mother is worried by all the problems her daughter is facing and asked her daughter to come and live with her permanently. Jane agrees, but latter argues with her mother and the mother repossessed the house and she promised Jane leaving homeless. Jelita has heard that you have done some contract law and seeks your advise. Advise Jelita of her rights with assistance of relevant cases.

Asked on 12/31/15, 6:34 am

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31.12.2015

Repeat query. Already answered. Any further advice or guidance will be rendered only on prepayment.

Answered on 12/31/15, 6:39 am

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