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Re: Personal Guarantee Advice
If there is no mention of the deed then it is a simple contract. Two reasons why a deed is used on guarantees because the limitation period is 12 years rather than 6 years and to avoid any doubt about consideration. Arguably, the investor in this case may say that the consideration is the giving of the £25,000 to the borrower and the guarantor does not need to benefit directly. That of course is up to a court to decide if that is considered adequate consideration.
Common defences to any guarantee contract is that there had been a misrepresentation , undue influence to sign the document, the terms of the contract relied on are unfair, or where the principle agreement is void or unenforceable for some reason or another that would also discharge the guarantor from their liabilities. Normally a guarantor would be required to seek independent legal advice and confirming from that solicitor that advice has been taken but to what extent that could be a defence here I don't know.
I was responding to charity and giving an example of when the transaction might be set aside but, if you look at clause 3.2 in the document it says the obligations of the guarantor will not be discharged if the following occurs and within it, it says about varying the terms of the agreement.
These types of agreements are complicated and would require proper legal advice along with the full facts and information to hand. Given the size of the sum, legal advice should definitely be the way forward.
If the sums can't be afforded then it might not be in the best interests of the creditor to pursue it in court if they are not going to end up getting anything due to non-affordability. They will be wasting legal costs and time and money. Another option would be to try and come to a reasonable and amicable agreement to repay the money if possible in affordable instalments.
If there is no mention of the deed then it is a simple contract. Two reasons why a deed is used on guarantees because the limitation period is 12 years rather than 6 years and to avoid any doubt about consideration. Arguably, the investor in this case may say that the consideration is the giving of the £25,000 to the borrower and the guarantor does not need to benefit directly. That of course is up to a court to decide if that is considered adequate consideration.
Common defences to any guarantee contract is that there had been a misrepresentation , undue influence to sign the document, the terms of the contract relied on are unfair, or where the principle agreement is void or unenforceable for some reason or another that would also discharge the guarantor from their liabilities. Normally a guarantor would be required to seek independent legal advice and confirming from that solicitor that advice has been taken but to what extent that could be a defence here I don't know.
I was responding to charity and giving an example of when the transaction might be set aside but, if you look at clause 3.2 in the document it says the obligations of the guarantor will not be discharged if the following occurs and within it, it says about varying the terms of the agreement.
These types of agreements are complicated and would require proper legal advice along with the full facts and information to hand. Given the size of the sum, legal advice should definitely be the way forward.
If the sums can't be afforded then it might not be in the best interests of the creditor to pursue it in court if they are not going to end up getting anything due to non-affordability. They will be wasting legal costs and time and money. Another option would be to try and come to a reasonable and amicable agreement to repay the money if possible in affordable instalments.
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