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Well indeed there is a double argument from Patrick

Patrick says that:

Doctor says that:

In Patrick case's, YES the depositors should have been VERY wary of the sub argument as it was fully disclosed because it was dubious that his claim is true. But it is not a common mistake because the depositor for Patrick or you with your doctor neither made any claim to the effect that what the other party claimed was factual and a requirement for the contract. They have to make the same claim.

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As I stated, what was agreed upon and claimed by Patrick is that Patrick:
- Accept deposits
- Pay X% on deposit
- Can cover the deposits

The arguments are purely for convincing the other party as to why the party is confident in his claims he promised you and as to why you should proceed with what the party offers you (To make a deposit/To make the test). The arguments brought forward are not contractual clauses required for the contract to be valid. In either case, nor the Doctor or Patrick or you or the depositor say the claim will be executed IF the argument holds to be found true/sufficient to guarantee the promise. Which would then be a contractual clause that it is required if they insisted the claimed would be delivered upon IF another specific scenario holds to be true.

Arguments are purely a convincing mechanisms that even if true, do not guarantee the claim to be executable.

Suppose this:
A borrower wants to loan 20000$ at 14% yearly interest. The lender asks him why he should grant him the loan. The borrower arguments, without making false statements, that:
 - I have a good credit rating. (true)
 - I have a stable job. (true)
 - I have enough assets to cover the loan should problems arise. (true)

The lender answers by "fair enough, works for me, I'll grant you the loan". Yet the arguments do not make the clause that the borrower will repay true.

The borrower default on his debt and insist you share the loss on the premise that there is a common mistake because he did not lie and both expected his arguments to be true which they were and deemed sufficient to grant the loan/contract and that now the loss is irrecoverable, so the loss is to be shared. The borrower keep his current lifestyle and doesn't depart with his non-essential possession to pay his debt just as Patrick did although he said he could cover the deposit.


You would be able to void full responsibility on any contract's clauses if you ever made any argument that was true yet didn't guarantee the clauses because the other party was convinced by those arguments. (The other party never said those arguments were required to be true to execute the contract or were what guaranteed the promise made by the borrower. They merely agree to be convinced by those arguments.)

As you said, Mircea agreed with Patrick's reasoning. A bank might have agreed with the borrowers's reasoning. It does not imply that neither agree that the arguments absolutely makes the claim possible and is 100% correct all the time. Just that they were convinced that the borrowers could reasonably be expected to be able to deliver his claim based on those arguments.

If the borrower gave an extremely ridiculous argument that he could repay because "His dog is brown (True)", you wouldn't have made a common mistake. You would have put yourself in the situation. You would have been incredibly stupid to be convinced by such a statement. But you did not made a common mistake as per contract law. The borrower is fully obligated to repay the loan because that's what he claimed he would do repay it and neither party added a sub-clause that this repayment was directly dependent on "His dog being brown" making "Repayment of the loan" possible.

The people who gave Patrick his funds made a risk misjudgement when they got convinced by his arguments. They did not make a common mistake.

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A common mistake requires both parties to make a factual claim to be considered a common mistake. Not one party making a claim and the other accepting the claim or accepting the arguments for that claim as convincing.

I gave an excellent example:
Buyer: I need cherries delivered in Washington. Can you deliver in Washington?
Supplier: Yes, I deliver anywhere in Washington.
Buyer: Perfect. *Pay's right away*
*Supplier imports cherries right away.*
Supplier: I have your cherries ready. What is your address?

Upon which the seller and the buyer realize the supplier is in the state of Washington and can only deliver there, and that the buyer lives in Washington D.C. and that the cherries would be impossible to deliver as planned considering the supplier's means to deliver which do not currently extend outside of the state of Washington.

There is common mistake when both parties made the claim to each other and each parties accepted it from each other, but the claim is not precise enough or is false for both. There is a common claim but also a common mistake as to what that premise making the contract executable means and it renders the contract impossible to execute as a result. There is no such common mistake in Patrick's case.

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I stress again that I am in no way saying the depositors didn't make the mistake of more or less blindly listening to Patrick. I am in no way saying that they didn't put themselves in that situation by lending somewhat carelessly to someone they assumed to be trustable. Because they made that mistake and are now in this situation. This situation would hardly be enforceable in court in any case.

I am not shifting blame away from depositors or that they didn't make bad decisions. I am just stating that common mistake (as per contract law) does not apply and that Patrick is still contractually obliged to cover the deposits in full merely because he promised it. And that he should get a scammer tag until this case is resolved too because he's unwilling to depart with his current non-essential personal assets to cover his debt.

I am not stating that this situation is fair for Patrick or that depositor didn't commit any mistake or that the contract would be enforceable in courts (mostly because I agree with your argument about usury rates which renders the contract somewhat null to start with.) I am simply insisting that according to current laws in most jurisdiction, if the contract had not been invalid, he would fully own the deposits to depositor and common mistake would not be invokable.

Ah, I see that now in that statement. He does not specifically claim his lendees are not invested in BS&T. Regardless of what Patrick claims, I still stand by the fact there was no common mistake on the premise only Patrick made the claim and that the depositor merely agreed that Patrick promised it, he did not also make the same claim, which would be required for a common mistake.

A bit old but still a good example:


Under your current arguments, Patrick would not have to give you your deposit back in full, because:
- He said the deposits would not be lost in case of BS&T default mainly because he has non BS&T investment which is apparently enough to cover those deposits. (He shows no proof of that and just states it to you.)
- You agreed to act upon that claim and proceed with it because you thought that was sufficient to guarantee the deposit.
- There was the common mistake that the deposits would not be lost, because Patrick had non BS&T investment which would be covering deposits if BS&T defaulted.
- Which was not the case because Patrick's non BS&T investment did not cover the deposits when BS&T defaulted.
- So the deposits' loss should be shared now that Patrick gave his loans based on the common belief that the non BS&T investment would be covering the deposits when BS&T defaulted.
- You both proceeded on the belief Patrick non BS&T investment would cover the deposits.

Under your current arguments, the doctor would not have had to pay you, because:
- He said you would not pay for the test in case you proceed with it because your insurance will apparently cover that cost. (He shows no proof of that and just states it to you.)
- You agreed to act upon that claim and proceed with it because you thought that was sufficient to not get to pay for the test.
- There was the common mistake that the test would not be paid for, because the insurance would pay for the test if you proceeded with it.
- Which was not the case because the insurance company did not pay it for you when you proceeded with the test.
- So the test's costs should be shared now that the doctor executed the test based on the common belief that the insurance would be pay the costs when you'd proceed with the test.
- You both proceeded on the belief the insurance would pay the costs.

The doctor's lawyer seems to agree with me about common mistake in contracts because your doctor ended up doing the opposite.

The depositors did not investigate if that was sufficient to guarantee deposits and took Patrick's claim for granted.
You did not investigate if your insurer would actually pay for it, yet you took your doctor's claim for granted.

Legally Patrick owes 100% of deposits for stating deposits would be covered on account of non BS&T investment prior to you accepting to deposit.

Legally your doctor owed you 100% the cost of the test for stating it would be payed for on account of your insurer paying for it prior to you accepting to do the test.

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The only difference is that depositors decided to more or less blindly trust a stranger over the web over some much less realistic claim.

While the last statement is true (that if people didn't lend their money left and right without investigation, the Pirate fiasco would not have been possible), they did not cause the loss of Pirate running away with the funds. Pirate is solely responsible for that. Their tort is giving money left and right without thinking which is a completely different mistake than the one causing the damage.

I am IN NO WAY suggesting we should not blame people for unknowingly giving their money left and right without extensive investigation. I am simply stating that Patrick legally owes the full deposits as what he claimed to offer, regardless if the loss would have been impossible if people did not enter in poorly defined/investigated contracts. The mistake is not the same. Patrick's mistake created the loss to for the depositors. The depositors' mistake placed them in the situation, but did not directly cause the loss.

If I recall right, he suggested something along those lines. You should find it rereading the thread.

It has only been a few days. I haven't gotten a hold of him just yet, but from the last newsletter he sent:

http://www.4shared.com/zip/9Lj1yWKB/krakenreports.html


He will not pay anything before he extract something out of BS&T which is not what he promised.

Can you prove that it was impossible to not be exposed to Pirate? It certainly could be possible to not be so and Patrick made a claim he was not. It's like me saying I trust someone to be honest, and upon realization he was not, you claim it was 100% impossible that person could be honest all along. Someone certainly can be honest, which might not end up being true. Patrick could well have not been exposed to Pirate, which did not end up being true.


Just like someone who says he will deliver X for 100$ because he'll deliver X for 100$. He doesn't argue about it. He CLAIMS it because that's what he offers to provide. If someone pays him up, the other party must provide what he offered.


Are you serious? He did not tell Mircea how he makes sure there's no exposure. He says there is no exposure. He straightforward claims to not be. No explanation or proof given.


Ok then, so you say Patrick says X because A and B were he only make a representation that "X because A", and A was true.

Patrick says:
(X) You can withdraw anytime because (A) I have enough assets to cover deposits because (B) I am not exposed to BS&T

(A) cannot be true if (B) is not also true. He made both claims: That he had enough assets to cover the deposits and that he was not exposed to BS&T. There is a chain of claims Patrick makes regarding what he offers. That any part of it is false does not make the depositor at fault of a common mistake.

A common mistake applies when BOTH party make the same claim which renders the contract impossible to execute and producing the loss. Not when one party accepts the contract based on what the other party claims to offer when what the that other party offer is false. A common mistake cannot originate from a single side of the parties. Both must have made the claim. Not one side making the claim and the other accepting it.

I have yet to see Mircea make the claim that Patrick was not exposed to Pirate. He never told Patrick: Your loaning business is free of Pirate debt." Only Patrick made that claim. Mircea agreed that this is what he wanted delivered. Not that it was true nor delivered.


Please avoid turning things in variables statement before stating that a specific variable is false without further arguments. There is no way to know what you assume each variable to be and thus make any knowledgeable decision that it is false or right because you didn't identify properly what you are talking about. I do not see any B in my example. My initial example was "X because A": (X) You can withdraw anytime because (A) I am not exposed to Pirate.

No, because Patrick did not say "I only loan to people who avoid Pirateat40", he said "The money is not invested in Pirate":

The equivalent of claiming that there's no such parts included. In this specific example at least it is what Patrick claimed. No pirate exposure.

Regardless of the reasons brought forward by the seller, the seller said "yes" in both case that he'd deliver something exempt from something. The buyer could be blamed for being incredibly credulous in what he believes when he's told something such as "It's impossible because I avoid it" if it had been the case, but he's still not at cause for the loss.

That example has an explanation which is pretty much impossible to hold true to explain why there's no exposure (I prayed). That there was no exposure might hold true however (I have no exposure). It is neither an explanation as in your example: Patrick does not say "I have no exposure to pirate because X Y Z". He simply makes a straightforward claim to it.

Mircea does not know and he's neither told how Patrick makes sure there is no pirate exposure. Mircea never had all that information you claim both party had. There is secret information. (Mircea is under no obligation to scour the forums, the web, or even the world, to find and verify what Patrick did not disclose for Patrick to have to respect his contractual claims. You could blame that he didn't pursue that information if you want, but that doesn't void the contract or make Mircea the partial cause of the loss to pirate exposure.)

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Let me reformulate with a because:

Buyer - I want to make a deposit to receive interests. Can you pay back anytime if Pirate defaults?
Seller - Yes you can withdraw anytime because I have no pirate exposure in my loans.
Buyer - That works with me, here's the deposit.
Seller - I am actually exposed to pirate and cannot deliver the deposit back. We should share the loss since we both thought I was not exposed. I would like to pay you back but hey, common mistake, I can't pay for all that loss! You're just as responsible as me for not lending to the correct persons, causing the pirate exposure, because you believed there was none, causing me to lend incorrectly!(False, the seller made the error of promising something he did not have. The buyer did not cause that loss.)

Buyer - I want a washing machine. Can you provide one?
Seller - Yes I can provide one because I have a washing machine I packaged in this box.
Buyer - That works with me, here's the payment.
Seller - Sorry, it seems I actually had a dryer packaged in that box and not a washing machine. Since I already shipped, we should share the lost on that cost since we made that contract on the premise I was able to provide a washing machine and both believed that, while I could not provide it. I'd like to reimburse you for that but hey, common mistake, I can't pay for all that loss! You're just as responsible for the shipping costs for believing I had a washing machine, causing me to ship the dryer to you in error! (False, the seller made the error of promising something he did not have. The buyer did not cause that loss.)

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Yet again, he's not agreeing the statement to be true, he's just accepting that claim as what the other party must deliver as per contract to honor it and that this offered clause satisfies him. The seller is responsible for honoring the clause he promised whether he willingly or mistakenly offered something he could not. Otherwise the seller cannot require compensation/keep funds because he did not honor his contractual claims.

Where do you get the idea that Mircea CLAIMED Patrick's portfolio was free of pirate debt? He never said: "Patrick, your portfolio contains no pirate debt, I can guarantee that to you." nor "Patrick, you have paid my withdrawal to me instantly."

He's stating: "I agree to pay for what you offer to deliver: Instant withdrawal, X% interest, no Pirate exposure."

The seller is the only one to blame for not delivering. The buyer never led Patrick to believe his portfolio had no pirate exposure, partially leading to Patrick's loaning practices and partially causing the loss. No "common mistake" applicable.

Patrick claimed that he would:
- Honor withdrawals instantly
- Pay X% interest
- He can pay if pirate default because he is not invested in BS&T

Mircea agreed that the terms of Patrick offered to deliver satisfied him, he did not claim Patrick's statements were truths. He accepted that he'd pay for what Patrick said he'd deliver and Patrick didn't deliver, which makes him in debt for breach of contract. He can't keep the deposits/share the loss.


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He wasn't hit by a bus and has the mean to pay out of pocket.

He has the financial means to repay more of his debt but won't pay it of his pocket/reduce his lifestyle to do it although he guaranteed instant withdrawal and that he's in debt. I don't think he can't meet his obligations. I'm claiming he is unwilling to.

I'm making that statement because this forum is a private one owned by theymos and he's free to apply whatever rules he wants as to how to apply tags. His "private club", his free speech as to how to attribute tags. Those tags don't hold any legal value.

If it's forum policy to allow people in default that have the means to pay back debt to pay it back instead at a rate they are comfortable with, even if that was not in the agreement, than fair enough. I do not make the policies.

I will agree with that as long as balances are paid out within reasonable delays, for this case, whether it is out of his pocket or otherwise, so long as all his debt ends up being paid.

No, because they claimed no responsibility and they were clear they would strictly deposit money for them with Pirate and charge them a part of the % given by pirate for the "service of depositing". They fully delivered on all their claims. All those operators claims were found to be true and delivered upon, which makes the arrangement valid.

Patrick on the other hand claimed to offer instant withdrawal and x% interest on deposits. He did not deliver not because he can't but because he is unwilling to pay the debt he incurred in full from his own pocket. Which makes it not a default but a scam. He neither delivers all his claim as per agreement nor refunds the funds he received for the agreement.

No, but they (the forum) should ban the one who went away with the money. Not people being similar to that person...

The question at hand is that Patrick did not honor some promises he made although he can still reimburse more. The debt for the deposits is his, regardless of what he do with the funds afterward. He did not present it as an investment/co-venture.

He offered to pay people X% interest on funds extended to him. He stopped although he still has personal assets he could pay his debt with.

Patrick did not deliver on his claims, so he's not entitled to the deposits. He's now in debt and yet will not pay personally for his debt.

All deposits should be regarded as loaned funds. Can you provide any evidence that it was clear an investment was being made and that people were not lending him funds on that % he offered on deposits? The way he presented things seems to indicate he was borrowing funds to run his loaning business and offered X% on balances, just like deposits at a bank. That Patrick's investments went bad does not concern the depositor, just as a bank's investments would not. Patrick/the Bank fully own the debt.

The issue is now that he guaranteed withdrawal, still has personal wealth, and willingly refuse to dispose of it to reimburse his personal debt.

Ah, but he does not receive a scammer tag for being in debt when there's no bad faith. He would get one because he operated as himself and that it is his personal debt and that himself has personal funds but of course won't reduce his lifestyle significantly to repay his debt. Which would technically make it a scam for refusing to depart with his assets to repay his debt which he claimed he would honor instantly.

It's purely technical. As long as he recover funds or repays it out of his pocket over time, I'm fine with it. But he willingly goes against one of his claim which would technically deserve a scammer tag. (It's his personal debt and he does not allow instant withdrawal/full repayment, even if he has personal assets to spare.)

Yes, but when Patrick claims he accepts deposit and that:
- You can withdraw anytime
- You'll be paid x% interest
- I am slightly or free of pirate debt exposure

People are accepting to lend him funds based on the premise that he'll deliver each of those claims. They are not making a statement that any of those claims are inherently true.

Buyer - I want to make a pirate free exposure deposit.
Seller - I am not exposed to pirate.
Buyer - Perfect, here's the deposit.
Seller - I am actually exposed to pirate and cannot deliver the deposit back. We should share the loss since we both thought I was not exposed. (False)

Buyer - I want a washing machine.
Seller - I have a washing machine in this box.
Buyer - Perfect, here's the deposit.
Seller - Sorry, it seems I actually had a dryer packaged in that box and cannot deliver. Since I already shipped, we should share the lost on that cost since we both believed a washing machine was being sent. (False)

When you accept a claim issued by one side of the contract, you don't claim it to be true or guaranteed. You agree that you WANT that claim executed/delivered in exchange of the funds.

To be a common mistake, the depositor would have had to authoritatively guarantee/tell Patrick that HIS operation was free of pirate exposure and that he was able to repay or led Patrick to believe it was also the case. I have yet to see a depositor make that claim. There is a huge difference between accepting one party's claim and conjointly making the same claim.

That's about the only thing you can blame the depositors on: blindly sending their money to anyone without researching. If you're looking at convincing people to no longer do that, don't try to twist things to make it the depositor's fault.

Believing the seller to deliver on his claims is not the same mistake as making a mistake which cause the actual loss.

Otherwise, if a loaner would tell you that he would like a loan and that he can claims he can repay it with his mining rig because it produces enough for that, and the lender agrees the proposition/proof is enough for him, if the difficulty ramps up making the loaner impossible to repay the loan by meaning, the loaner is not freed of a part of the loan value on behalf it was a common mistake. The loaner is still in debt. There is no common mistake in accepting claims by the other party which ends up being false because the buyer cannot verify that and can expect the seller to deliver upon his claims. Neither is this acceptance of the claims the direct cause of the damage.


The buyer's error is that the seller claims would be contractually executed. Otherwise someone telling you he'll repay you and you accepting that to loan him funds would place you at common mistake if the loaner cannot repay you (not because he willingly conned you but because he ended up not being able to collect enough money to repay you. Both of you believing that he could.) Is he freed from debt?

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And I'm pretty sure that's what everyone who deposited did. That they believed that Patrick could deliver what he said he's delivering, not that what he said is true. If I had chosen to accept his claims, I'd be on the belief that Patrick could deliver. I would remain in doubt he had exposure has I can't verify that and would neither claim to be true what I cannot verify.

People where lending him funds for his business like they deposit at a bank so it can do it's business of loaning funds/safekeeping. The contract was that he'd deliver X interest and would allow withdrawal anytime.

When someone accepts a claim that the seller is delivering something, he's not acknowledging that the claim is a requirement for the contract to be executed or that the claim is true. That person acknowledge that they pay for the delivery of that claim. The buyer is not at tort for believing the seller can deliver. The belief the seller would deliver is not the cause of the damage. The damage is solely on the seller's shoulder for not delivering.

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As you said however, it would be very hard to enforce in a court and as such, people might be blamed for not being careful enough as to who they extend their money to. But that doesn't free the borrowers from delivering upon their claims because the lender believed the borrower could deliver those claims. He should get a scammer tag for not delivering what he claimed he would deliver until he can deliver deposits back in full.

It would definitely not hold in most jurisdiction. The buyer never made the common mistake of not delivering or causing the incorrect delivery. They did not cause the loss either. They made the error of believing the seller would deliver on his claims.

You now insist that to be analogous to Patrick's situation, we must add it's a common mistake because they accepted upon delivery that it was correct, but when people agreed to Patrick's statement, no delivery was made yet, Patrick was simply making claims as to what he'd deliver and people paid afterward, expecting later delivery as claimed. They couldn't acknowledge it was properly delivered before Patrick returned funds/covered the loss/his debtors paid him/proved where they used funds. They acknowledged the terms of delivery trusting the "seller" (Patrick) to deliver on those claims. They never checked the delivery content and acknowledged to have received what was expected yet. They could only make such a mistake on returned funds.

Nevertheless, even if they did confirm the delivery was properly done when it wasn't and then realized it was not, the seller would still have to provide the goods paid for in full. In the example, even if the buyer acknowledged correct delivery, this acknowledgement did not create any damage/loss. Assuming they would have realized right away there was a mistake, the seller would have to provide the missing goods. If they make a mistake on being delivered properly and realize it wasn't, it only delays the seller providing the goods in full to correct his mistake. The bad report that goods were correctly delivered NEVER caused the seller to not send the goods in full and/or lose part of them. The seller is fully responsible for that. The buyer assuming the full goods would be delivered as claimed by the seller which assumes the same thing neither makes the buyer responsible for the error.

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A common mistake would be if the buyer was for example in Washington (D.C.) and the seller was in Washington (state) and was equipped to deliver in Washington (state) only. On call, both assumed they were in the same Washington when making their contract which ends up being impossible to be delivered before the cherries spoil. Since the buyer also caused the loss through his mistake because both parties did not correctly specify their exact delivery location / delivery zone, he could be judged at fault too and expected to share the loss's cost because the supplier acquired the cherries and they're spoiling. Yet seller could be considered just as much at fault for claiming he was delivering in Washington but not specifying if it was the state or the city. The common mistake of not specifying the exact location directly rendered the contract impossible to execute and caused the loss.

If the seller claims to have something he can deliver an he could execute the delivery if he's right, it does not constitute common mistake. The contract is solely impossible because the sellers fact were wrong and the buyer expected them to be right. It is akin to the seller claiming he delivers in Washington D.C. when he never could. Or someone claiming he could repair something when he does not have the knowledge to. Someone claims he'll deliver X and delivers Y. Patrick claimed to not be exposed when he was. The fact the buyer assumes the seller's statement to be right does not cause the loss or invalidates the contract because the seller could execute it but did not actually have what he claimed, then the seller is fully at tort for not delivering. If someone claims to deliver something in a contract, he's the only one to blame if he did not have the means to. Still, pirate exposure is not even included in the contract to start with which further invalidates that as a potential common mistake. (See further below.)

Common mistake applies when the mistake cause the loss. Not when the mistake is that both believe their would be delivery without a loss while the seller and deliverer was in charge of delivery and the means to do so, and ended up failing to his promises.

(I am no lawyer and unless mistaken, you probably are not either, so feel free to object to these statements/provide further input. They are based solely on my general knowledge and my understandings of the concept.)

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Aye, but we're going back to the fact depositors were not investing in Patrick's business or receiving a share of the profits. They were loaning him funds against interest and for safekeeping (financial services) and were led to believe Patrick operated as a bank (Offering said services and Patrick making a profit for himself with the business (the difference between the deposit rates and lending rates.)

The non-exposure to pirate was never part of the contract or included in it and cannot be invoked as a common mistake. Patrick offered a straight "- Deposit money -Receive x% interest" (The actual contract) accounts and operated as bank. The fact people informed themselves about the service provider's practices and declared they liked what they were told does not put any responsibility on them.

As for your thoughts experiment, I personally believe the answer would be "No", which doesn't mean others would assume the same thing or ever received this answer which would make that clause valid.

My bad.

That part is a quote of a previous comment and do not appear to be Augusto's words. I also fail to see how it is relevant to the current issue at hand: How should the situation be dealt with?

No. It might not have been on the contract but if he claimed there was 1500 pounds verbally and there is not 1500 pounds, one could contest the contract for misrepresentation, regardless if the seller knew he was wrong or not, he made a claim and that claim should be honored. If the seller cannot honor the contract which requires 1500 pounds, he cannot either refund it partially either and share loss. Since he cannot deliver, he cannot keep/void any part of the $3000 which cannot be either given to seller as part of the contract.

Let me rephrase your example:
A company creates a product which they claim to be packaging and selling in packs of 4. Someone buys the packaging also believing there is 4 items per pack and it's shipped to them. The buyers and the company realize there was an error and only 3 items are inside each pack.

Company to buyers: "Sorry, common mistake, we both believed there was 4 products included but we couldn't deliver what we claimed and you believed it. We're just as much at fault for that now that it's shipped and we paid for packaging and delivery. Since we both made that mistake on assumption of the package's content and we can't undo those shipments, it would be fair to share the loss."

Your proposal would not hold in any jurisdiction that I know of. If they made a claim to deliver 1500 pounds for 3000$, they would have to deliver what was claimed or otherwise refund the money which was given based on the claim they would receive 1500 pounds which didn't occur. If someone doesn't deliver upon his claims, he's always at fault for making claims he could not deliver on, not the ones believing their claims. Although maybe you simply do not agree with the common practices. Which would be fair enough, everyone is free to have their opinion.

I see. However:

He made claims, depositors accepted them. It does not make the depositor partially responsible if the claims were wrong. Patrick was the only one making the verification and was being extended money not as investment but as a loan.

Isn't the premise of granting any business loan based on the belief that the borrower's assessment/business plan is sound and sufficient to guarantee the loan? (Unless you're lending based on trust of someone you know.)

Your proposition would come to the conclusion that unless you don't make any investigation before loaning the money to someone, the lender is always as much at fault as the debtor and should share the loss, because as soon as you know any claim by the borrower upon which you accept to extend them the funds, you're at fault as much as the borrower for being mistaken on the borrower's claims?

As such, to not share losses when loaning with the borrower, never investigate the borrower's need for the fund and current financial situation?

Patrick made a claim and was mistaken. The lenders were mistaken in that Patrick could execute and ran his business as he claimed he would. I'm in no way claiming he did it on purpose. But the fact his business plan did not work as expected does not put the lenders at fault for acknowledging his business plan appeared to be sufficient. This is the whole difference between buying equity in a company and extending fund based on claimed business plan. Equity is shared profit/loss, extending fund, losses are wholly on the shoulders of the borrower.