Directors guarantee I was not told about

[Emptysack]

I was the director of a company that had a trade account with screwfix. When the account was opened it was opened in the ltd companies name and I was never told about an directors guarentee.

The application form that I signed had been photocopied that many times most of the writing on it was illegible.. Stupidly I signed it and opened the account.

A couple of years later the company got into financial difficulties, became insolvent and folded. I soon received word from screwfix`s solicitors that I had signed a directors guarantee and was personally liable for the company debts to screwfix. I got a copy of the original agreement and it is totally illegible.. You can barely read any text on the agreement out it is that bad.

Ive to go to court next month as I`ve contested the claim as I was unaware I was signing such a guarantee and am unsure if they can enforce this as what Ive signed is unreadable.

Does anyone know if this can be enforced if its illegible and I wasn`t informed I was signing such guarantee ??

I will photograph the agreement and attach it to my next post.


Thanks in advance for any advice on this issue

[wales01man]

Re: Directors guarantee I was not told about

The Directors Guarantee is on the application form above where you signed?
Expect them to say you knew what you were signing

[stevemLS]

Re: Directors guarantee I was not told about

I think as a company director you will have been expected to take care that you knew what you were signing and were indeed in neglect of your duty to the company and it's shareholders in not taking such care. Sorry but that is likely to be how the court will see it.

[Emptysack]

Re: Directors guarantee I was not told about

The thing is though that I didn`t know what I was signing. It was done in a screwfix store which had only recently opened and the person who dealt with it didnt seem to know what they where doing, seemed as if there was something in it for him if I opened an account. It was a case of "stick you business name there and sign that bit".. not one mention of directors guarentee

Sitting here looking at the application form and it is totally unreadable.. I`ll go on to my main computer and upload it now

[Emptysack]

Re: Directors guarantee I was not told about

Surely if it goes to court its up to them to actually prove it is indeed a directors guarantee rather than an illegible a4 page ?

[Emptysack]

Re: Directors guarantee I was not told about

here is the apparent guarantee...


https://drive.google.com/file/d/0B6T...ew?usp=sharing

[stevemLS]

Re: Directors guarantee I was not told about

Don't know whether it has for anyone else but that upload doesn't work on my computer.

[Emptysack]

Re: Directors guarantee I was not told about

Don't know whether it has for anyone else but that upload doesn't work on my computer.

I`ve removed the upload and added a link to the agreement

Thanks

[stevemLS]

Re: Directors guarantee I was not told about

Just looking at their trade account T&Cs http://www.screwfix.com/images/help/...n_23_09_10.pdf it is a condition of providing an account that a director give a personal guarantee. Condition 12.

So, at the hearing:

Emptysack: But it was illegible

Their solicitor: If it was illegible why did you sign it.

Emptysack: Erm

(Possibly judge): Are you aware of the duties of a company director?

Whilst yes, it does look poorly printed, although impossible to tell whether that is a fair reflection of what you signed, you are expected to show due diligence when signing on behalf of a company.

Apologies if this seems blunt.

[Amethyst]

Re: Directors guarantee I was not told about

There's a thread http://www.consumeractiongroup.co.uk...crewfix-Direct which might have some useful information (I was looking for a clearer copy of the contract to read but I can't open attachments on there as I'm barred ) He has typed a little bit out

"I confirm that we have read and agree to the terms and Conditions supplied to us by Screwfix Direct Ltd. I the director, agree to guarantee performance of all the company's financial obligations to Screwfix Direct Ltd and it's subsidiaries"

Another one here http://www.consumeractiongroup.co.uk...=1#post3610314

Maybe possible to think on;

If you signed the Guarantee in the Capacity of Director of the Company and resigned therefrom several months before the creditor called in the guarantee, then you are not liable for debt claimed because a) you signed the guarantee agreement as director of company and b) you resigned from the company several months before the creditor sought to enforce the same against you, based upon these circumstances, it is not a personal guarantee, therefore, you are not liable.

Will see what else I can find. That wording isn't clear at all tbh.

It really does depend on the legibility of the contract at the time you signed it and what the wording is exactly. The document you have posted really wouldn't suffice as evidence of a personal guarantee being given - particularly as you have signed it in capacity as Director of a Ltd company.

I believe there are also some rules about being advised to seek separate legal advice - but that may just be on business loans. It's a while since I've looked at guarantees so will try have an investigate tmw.

[wales01man]

Re: Directors guarantee I was not told about

One for Judge to decide defence does not seem to me as much use when we sign documents that are legally binding we are presumed to have read and understood them why was the shop getting the OP to sign a photocopy or is there a clear original ready to be produced.

[Amethyst]

Re: Directors guarantee I was not told about

Ahhh - went to Screwfix website lol.

Here

By signing this application form you accept that: A: you have read, understood and accept the Trade Account Terms and Conditions (set out on page [3]) and the On-line Access Terms and Conditions (a copy of which is available at www.trade.co.uk). B: If your application is successful, any purchases made by you using your Trade UK Account will be subject to the Screwfix Direct or B&Q trading terms and conditions (copies of which are available at www.trade. co.uk). C: You have read, understood and accept the Trade UK Privacy Policy. D: All information provided by you when making an application for a Trade UK Account is up-to-date, correct and may be relied upon by us. E: If you are signing on behalf of a firm or company, you are an authorised representative of that organisation and are entitled to legally bind that organisation. F: We may, in our sole discretion, decline your application without reason and may amend or withdraw any credit facility we grant in accordance with the Trade Account Terms and Conditions. G: If the organisation in whose name the Trade UK Account will be held is (a) a company and you are a director of the company, or (b) a partnership and you are a partner in that partnership, you will personally guarantee performance of all of that organisation’s current and future financial obligations to Trade UK (including any subsequent increase(s) in the credit facility extended to that organisation).
* Please note for a Ltd/PLC/LLP/LP this form must be signed by a director Name

see attached

[Amethyst]

Re: Directors guarantee I was not told about

How much is the claim for?

[Emptysack]

Re: Directors guarantee I was not told about

Just looking at their trade account T&Cs http://www.screwfix.com/images/help/...n_23_09_10.pdf it is a condition of providing an account that a director give a personal guarantee. Condition 12.

So, at the hearing:

Emptysack: But it was illegible

Their solicitor: If it was illegible why did you sign it.

Emptysack: Erm

(Possibly judge): Are you aware of the duties of a company director?

Whilst yes, it does look poorly printed, although impossible to tell whether that is a fair reflection of what you signed, you are expected to show due diligence when signing on behalf of a company.

Apologies if this seems blunt.

No need to apologise at all mate, I was just looking honest opinions. If its ruled in their favour I guess I will just have to pay it or do without credit for 6 years. Its not an enormous amount of money tbh. To me its the principle of the matter..

I started using screwfix as a branch has opened in my area, after a few visits one of the guys said I should open an account and I agreed and he went and got a form. In fairness I just glanced at it but I remember it being as illegible as the copy Ive posted above. I put my company details on it and signed it.. Unfortunately at the time I did not go online and read the terms and conditions, but I do feel if there was a guarantee I should of been made aware of it.

I`m not a lawyer or a solicitor but I do feel that agreements should be legible and if they are not then they are not worth the paper they are wrote on.. but again I do not know the law,.. this is an assumption I`ve made :-)

[Amethyst]

Re: Directors guarantee I was not told about

SCREWFIX DIRECT LIMITED -v- (Mr Z)*
11 October 2014 0 comments

Screwfix Direct Limited brought a claim for an amount of money against Mr Z for being a personal guarantee. It was successfully defended at Grimsby County Court where the Claimants case failed at the final hearing.

The Court found and agreed that there was no personal guarantee in place.

Might be worth trying to find more out about that case