'Pay Now - Argue Later': Conclusive Evidence Clauses in Commercial Loan Contracts

摘要

A lender suing for repayment of a loan must ordinarily prove its entitlement to payment of a specified amount. To avoid delays and to expedite recovery, lenders commonly contract that the borrower's or surety's indebtedness can be determined by an officer of the lender issuing a certificate that serves as evidence of the amount payable. There are two permutations: a conclusive evidence clause (CEC) and a prima facie evidence clause (PFEC). A PFEC excuses the lender from adducing evidence of the borrower's indebtedness in recovery proceedings, but it does not deny the borrower the opportunity to raise defences or dispute the accuracy of the claim. A CEC, on the other hand, purports to deny the borrower an opportunity to dispute the correctness of the certificate in the face of a demand for payment. In other words, a lender is entitled to be paid the amount stated in the certificate, without protest from the borrower. The focus of this article is how best to conceptualise CECs so as to aid in their analysis and construction. The article reviews the principles governing CECs with reference to cases decided in England, Australia and Singapore, and suggests a workable understanding of the clause which balances both the lender's and the debtor's interests.