Rainey Collins Lawyers

Ensure a guarantee is in writing

By Alan Knowsley, Monday, 16 January, 2012, Business, Company

In several recent cases businesses that thought they were protected by a guarantee have missed out because the guarantee was not properly completed.  When the debtor failed to pay, these businesses tried to go after the guarantor only to discover that the guarantor had not actually signed the guarantee.

It is common practice, especially if a company is entering into a contract, for an individual, possibly a director or shareholder of the company, to provide a guarantee.  This guarantee may be called upon if the company cannot pay its debts.

It is important that a guarantee is properly drafted and executed.  This includes ensuring that the guarantor signs the guarantee.  If the guarantee is not signed, or if it is not properly drafted, the guarantee may be unenforceable.

These examples demonstrate that it is essential to ensure that guarantees are correctly completed and signed.  Often guarantees are not signed or filled out correctly because staff are not aware of the significance of this paperwork.  Businesses need to ensure that staff have appropriate training in the importance of guarantees and how to fill the forms out correctly.

We are able to assist you with guarantees and can ensure that they are correctly drafted and appropriate for your situation.  If you want help drafting or reviewing a guarantee, or if you would like advice on how to ensure your paperwork is completed properly, feel free to call us on 0800 733 424.  We are also happy to organise training for your team members.

Call us Toll Free on 0800 733 424