Personal Guarantee on Company HP agreement

[Billt]

Re: Personal Guarantee on Company HP agreement

Here's full thing in that case

Continuing Guarantee
NB-If the customer is a limited liability company or partnership established less than three years the continuing guarantee below MUST be signed by a director or secretary (in the case of a limited liability company) or equity partner (in case of a limited libility partnership). It may also be required to be completed in other cases.

To xxxxxxxxxxxxxx Ltd
In consideration of your agreeing to grant credit facilities to the company or limited liability
partnership described above (“the Company”) I hereby unconditionally guarantee the due and punctual performance and observance by the Company of its obligations herein and under your Condition of Sale overleaf, and agree to indemnify and keep indemnified against any breach or non observance thereof by the Company.
Authorised Signature . . . . . . . . . . . . . .

on the back is there this clause,?

(c) you become insolvent or make any composition with your creditors or
have a receiver appointed of all or part of your undertaking or assets
or go into liquidation (save for the purposes of amalgamation or
reconstruction) and we shall be entitled to recover from you all our
loss including any loss profit or loss on re-sale.



Burger. Now this was signed 'to update' their records. The original contract you have, did this have the same clause in ?

This is a bit about continuing guarantees - Legal problems of credit and security - Google Books

I have never seen the origional contract it was opened long before I joined the compnay.

Should it not have been explained to me what I was signing?

[Billt]

Re: Personal Guarantee on Company HP agreement

I have never seen the origional contract it was opened long before I joined the compnay.

Should it not have been explained to me what I was signing?

I have just read the link you sent me about continuing guarantees. Don't look very good for me.

I know there is no excuse for negligence but I dont understand how it can be that easy to misslead someone into commiting to signing every thing they have away.

Untill now I had never even heard of a continuing guarantee.

Is it worth me employing a solicitor to fight this case. If so what type of solicitor should I be looking for and what it would cost.

[Amethyst]

Re: Personal Guarantee on Company HP agreement

No I agree it doesnt look very good. I'll nudge Cetelco to have a look now we have the full wording from the form.

Were you the only director to sign such a form?

It seems quite a common clause in such credit agreements

http://www.western-electrical.co.uk/...ation_form.pdf
http://www.acorn-ind.co.uk/pdf/appform-swest.pdf
http://www.cewltd.com/userfiles/file/Account%20Form.pdf

for example.

[Billt]

Re: Personal Guarantee on Company HP agreement

No I agree it doesnt look very good. I'll nudge Cetelco to have a look now we have the full wording from the form.

Were you the only director to sign such a form?

It seems quite a common clause in such credit agreements

http://www.western-electrical.co.uk/...ation_form.pdf
http://www.acorn-ind.co.uk/pdf/appform-swest.pdf
http://www.cewltd.com/userfiles/file/Account%20Form.pdf

for example.

Yes I was the only director to sign.

[Amethyst]

Re: Personal Guarantee on Company HP agreement

I wonder whether the director who signed the first agreement would still have some liability or if the new agreement completely superseeded the original.

[Guest]

Re: Personal Guarantee on Company HP agreement

The doctrine of misrepresentation can vitiate contracts of guarantee and indemnity and I would suggest that if you were not informed of all the material facts at the time, then you may claim that the continuing guarantee is invalid, notwithstanding that it is well settled that a contract of guarantee is not uberrimae fidei.

In this case you will need to make reference to the Misrepresentation Act 1967. This is very useful because it shifts the burden of proof back to the supplier. It establishes that a customer should be able to rely on the information given and that even without an intent to misrepresent, if the consequences of a misrepresentation are such that a customer is disadvantaged then that is enough. It also establishes that a clause in a contract which states that a signature indicates full acceptance is not valid where it would be unlikely that the customer would have the skill and inclination to go through the fine detail, which may also help you here.

For some light reading, take a look at Howard Marine and Dredging Co Ltd v A Ogden & Sons (Excavations) Ltd [1978] which details the Act in action.

You must argue that when you signed the guarantee you were misled by the words, acts and conduct of the supplier into believing that there had been no change in the agreement between your company and the supplier and had you believed otherwise, you would not have signed it. Indeed you even stated that the rest of the form was not even filled in by you, but was completed by the supplier and that it was confirmed to you that the form was merely to update their records.

As for whether or not you need a solicitor and what it will cost, that is up to you but whatever the cost, even should you hire Jones Day, it is very unlikely to amount to the £22,000 that they are attempting to claim from you.