How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Alex J. Your Own Question

Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3495
Experience:  Solicitors 2 years plus PQE
13113900
Type Your Law Question Here...
Alex J. is online now

I am in court tomorrow because when I was a director of a company

Customer Question

I am in court tomorrow because when I was a director of a company I signed a personal guarantee which stated I would make payments for all sums due from "my" company. The guarantee related to a tool hire account. When I resigned as director and shareholder I had nothing more to do with the company whatsoever and wrote to the hire company telling them I had left etc and to remove my guarantee or close the account. They claim this was never received and even if it was then it wouldn't matter anyway. Therefore it seems strange that regardless I have to pay. As an example if this came about in 20 years time then regardless of anything I would be responsible for everything for the rest of my life??

I know that this account was used for this company and another which was setup with someone else. I am arguing that the other company shouldnt have been using it even at all even if one of the directors was for both companies.

I have requested copies of signed delivery notes but the hire company cannot produce many of them and state that it doesn't matter anyway because the director of the company admitted to the debt on the CCJ. I disagree as they are now chasing me for the money.

So I have three questions.

1. Should I be entitled to the signed delivery notes to prove that the items hired were not for the use of the account holder. I.e signatures for people not employed by the company. I have evidence stating that authorisation was not granted after a certain date for the other company to hire goods?
2. Can I rely be liable for the rest of my life despite having resigned and despite the contract stating "my" company which it no longer was?
3. Would my argument fall under UTCCR as it would seems from the claimant that the agreement was signed as a non director if they won't let me exit at all. As such does this mean that under UTCCR there is a significant in balance and I had no way of knowing that the term for personal guarantee would exist with me for life regardless of my status within the company.
4. Is there grounds to go to the court today to request an adjourement and an order based on needing the delivery notes for form my proper defense or should I just goto court tomorrow and argue this and then request an adjournment?
I have received this information that means I need this from the remaining director this morning.

Just to let you know the company is now in liquidation and the other company that hired the stuff is already struck off.

I hope all that makes sense.
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.

Alex Watts :

Hello my name is XXXXX XXXXX I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.

Alex Watts :

Did the hire company release you?

Customer:

No, I wrote to them immediately that I resigned and handed back the shares. They claim to have never got the letter. This was some 4 years ago now. Since then I lost my home so they have had to track me down. I already have a CCJ and have issued a statutory demand. I am in court tomorrow to request both are set aside.

Alex Watts :

Its bad news I am afraid.

Alex Watts :

Unless THEY released you, you are bound

Alex Watts :

It makes no difference whether or not you resigned, you are still liable until payment is made in full or they release you.

Alex Watts :

Just because you wrote to them, that does not release you

Alex Watts :
1. Should I be entitled to the signed delivery notes to prove that the items hired were not for the use of the account holder. I.e signatures for people not employed by the company. I have evidence stating that authorisation was not granted after a certain date for the other company to hire goods? - No. It is for the Company to dispute any debt, you are there ONLY as guarantor.
Alex Watts :
2. Can I rely be liable for the rest of my life despite having resigned and despite the contract stating "my" company which it no longer was? - Yes. You signed the guarantee. Only the company can release you.
Alex Watts :
3. Would my argument fall under UTCCR as it would seems from the claimant that the agreement was signed as a non director if they won't let me exit at all. As such does this mean that under UTCCR there is a significant in balance and I had no way of knowing that the term for personal guarantee would exist with me for life regardless of my status within the company - No, that does not apply. You are NOT a consumer. You could have taken legal advice or refused to sign it.
Alex Watts :
4. Is there grounds to go to the court today to request an adjourement and an order based on needing the delivery notes for form my proper defense or should I just goto court tomorrow and argue this and then request an adjournment? I have received this information that means I need this from the remaining director this morning. Just to let you know the company is now in liquidation and the other company that hired the stuff is already struck off. I hope all that makes sense. - Sadly not. You signed the guarantee and you are bound by it

 

Alex Watts :

I am sorry if this is not the answer you want and certainly not the one I want to give you, but I have a duty to be honest

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

Strange, because it was my understanding that UTCCR can apply as it is arguable that a PG has not been signed as capacity of director but instead as a shareholder. For arguments sake if I wasn't a director and just a friend, would you answer have been the same??

Alex Watts :

Yes. Because why as a friend would you guarantee a Company's invoices?

Alex Watts :

This is in the course of business.

Alex Watts :

Therefore UTCCR would not apply.

Alex Watts :

You can try it because you have nothing to lose, but you are likely to fail.

Alex Watts :

If there is a CCJ then you should have defended it at this stage

Alex Watts :

If there is a CCJ and now a stat demand you have no grounds for contesting it

Customer:

Sorry i'm not very happy with your advice here so will seek someone elses help.

Alex Watts :

You asked what your legal position was.

Alex Watts :

You are not a consumer in this PG

Alex Watts :

You are bound by the terms of contract law UNTIL released by the creditor OR the debt is paid

Customer:

Yes and believe that you opinion is in correct. Maybe as a solictor this is out of your league. I have spoken on here before with a barrister and they provide other ideas which conflict with yours.

Customer:

Can you release my question please and make it available to others. Thanks

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you for your question and welcome.

My name is XXXXX XXXXX I will assist you.

I will write a response to your questions but I will need some further information and the response will take me some time so you may not hear from me until later this evening:

1. Is the guarantee with a finance company i.e a bank or other regulated institution or is it directly with the owner of the equipment?

2. Do you have the wording of the guaranteed liabilities?
3. Was the guarantee executed as a deed or did it say something like "in consideration of terms of this agreement I hereby personally guarantee prompt and punctual payment of liabilities of the company?"

I look forward to hearing from you.

Kind regards

AJ
Customer: replied 2 years ago.

Hi,

 

Thanks for your reply. The answer to your questions are:

 

1. The guarantee is not with a bank etc and is with the equipment hire company directly.

 

2. The application form under section e states:

 

"Guarantee

 

I (the undersigned) agree that all transactions of hire and sale entered into by my company (known as "The Customer") shall be subject to Brandon Hire Plc 'Conditions of Hire or Sale', as the case may be operative at the time of any contract of hire or sale. I will make full settlement of all monies due within one month from the date of Brandon Hire's invoice and I have answered all questions on this application for truly and fully. I hereby, personally guarantee payment in respect of all sums due from my company ("The Customer") to Brandon Hire Plc together with all ancillary costs incurred. I have retained a copy of this form for my records."

 

On their original claim they state the word "The" and not "My". As the company ceased to be "My" company then surely I wouldn't be liable any longer as it was no longer mine. Also the invoices cover a period of three months so why wasn't the account put on stop. Also the company had a credit limit of £500 so why did they allow a £10k to build up??

 

3. I think I answered this above hopefully??

 

Thanks

 

Do you know when you may have an answer for this as I am in court in the morning?

Expert:  Alex J. replied 2 years ago.
Thank you.

My apologies I have just received this.

I am writing a response now I will post it in the morning at the latest.

Kind regards

AJ
Customer: replied 2 years ago.

Hi AJ,

 

I am still waiting for a reply on this. If you are unable to help then please release the question to someone who is. You keep saying you will reply but don't????

 

I went to court this morning and it was adjourned due to the case not being listed for long enough.

 

Thanks

 

 

Customer: replied 2 years ago.

Hi AJ,


 


I am still waiting for a reply on this. If you are unable to help then please release the question to someone who is. You keep saying you will reply but don't????


 


I went to court this morning and it was adjourned due to the case not being listed for long enough.


 


Thanks

Expert:  Alex J. replied 2 years ago.
Hi,

My apologies.

I opted out because I thought I had been too late.

I am typing up my response now.

Kind regards

AJ
Customer: replied 2 years ago.

Hi AJ,


 


It was kind of too late but because it has been adjourned then it is now fine so I would like your help still.


 


Thank you.

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Have read the wording above the point I find interesting is that potentially you may have grounds to claim that this guarantee is unenforceable due to lack of consideration.

There two elements to a guarantee first it has to comply with the Statute of Frauds 1677 i.e be in writing (old law but good law) and second it must be an enforceable contract. On the facts you have presented this simply appears to be statement saying you will be liable for the company debts to the leasing company. This is not a contract and it could fail as it should have said either (i) your guarantee was a condition of the lease or (ii) "In consideration for the lease you hereby guarantee the obligations of the company - in order to be enforceable.

Unless this document was executed by you as a deed I believe you would grounds to say it is unenforceable as there is no contract between you and the leasing company due to lack of consideration.

DId you sign the document stating that it is in your capacity as a director? Did you sign it as a deed?

I look forward to hearing from you.

Kind regards

AJ

Customer: replied 2 years ago.

Hi AJ,


 


Thanks for your reply. They have been my thoughts exactly but being I am no law man I needed this confirmed.


 


The application form was signed in the capacity of director and there is no mention of a deed etc. The only mention there is, is what I typed exactly from the application form.


 


The hire company have also stated in their witness statement that the guarantee was given in the capacity of director, owner or affiliate. Therefore I have a feeling that the application form was for a business contract and cannot also be used for a consumer contract for a PG. If there were a PG to be had then surely this should have been negotiated independently and not on a standard form and therefore falls under UTCCR and UTCA 1977??


 


It should also be further noted that this agreement was signed on the side of a road in the space of 5mins with an account manager who met us on site. The hire company refuse to comment on this when asked.


 


Therefore it remains, if the application was signed by a director for the purpose of a business contract with one signature, can that same contract b and signature be applied to a PG which would clearly be a consumer contract.


 


Any further help would be great and also any ways best to advance an argument. If you have an email I can send you a copy of the signed form and t&c's but only if you are allowed to give emails on here and you are happy to do so.


 


Many thanks.

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

You should be able to send the full t an c's [email protected]

I would not get too bogged down with UCTA - it is for consumer protection and it is not ideal to be getting into a dispute about a whether it applies and furthermore the reasonableness of the clause. Not drawing your attention to it is clearly unreasonable.

The fact remains:
(i) The clause is potentially unenforceable for lack of consideration;
(ii) You have not signed it in your personal capacity therefore under the Statue of Frauds you have not validly accepted liability for the debt your personal capacity.

Is this included in your defence?

Kind regards

AJ
Expert:  Alex J. replied 2 years ago.
Hi

Can I be of any further assistance with this?

Kind regards

AJ
Customer: replied 2 years ago.

Hi Aj,


 


Sorry for the delay responding here but I have been ill the last few days.


 


The above is not in my defence.


 


Would you mind elaborating on:


 


The fact remains:
(i) The clause is potentially unenforceable for lack of consideration;
(ii) You have not signed it in your personal capacity therefore under the Statue of Frauds you have not validly accepted liability for the debt your personal capacity.


 


The claimant have said in their witness statement that the personal guarantee is separate to opening the account. They also said that I couldn't close the account even if I wanted to because I was no longer an officer of the company. Surely they can't have it both ways and say that I signed as a director but also personally all in one signature.


 


Would I be correct in thinking they really needed to have two signatures on the form for it to be effective personally. It is my believe that me signing as a director and putting on the form Postition: Director then I am acting in a completely different legal identity to my personal one?


 


They have also provided a county court case where they won against another director and the judge agreed that it was signed so the director was liable from a personal point of view. This is worrying but am I right to say it is not a precedent as it has not come from a higher court. Also this is slightly different because the guy was still a director of the company whereas I resigned years ago thus cancelling out the term "My Company" on the gaurantee section.


 


It seems they want the moon on a stick with this.


 


I have to submit my reply to their witness statement on Thursday so would appreciate it if you could provide a detailed response for the statute of fraud that I could use to argue along with any case law that may support me if you know of any that I can search for?


 


Many thanks for your help.

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

I will review this as soon as possible. Please do not be concerned if you do not hear from me until the morning.

Kind regards

AJ
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you for your patience.

Do you have a copy of the guarantee to hand?

Is the guarantee a seperate document or was it contained within the leasing document?

Kind regards

AJ
Customer: replied 2 years ago.

Hi AJ,


 


Yes, I do have a copy of the document.


 


It was all one application form to open an account for the company.


 


The guarantee is not a separate document and there was only box to sign for both the application and the alleged guarantee.


 


It may be better if you could see the form. You stated to send previously [email protected] but I am not sure you would get it if sent to there.


 


Regards


Steve

Expert:  Alex J. replied 2 years ago.
Hi,

Can you copy and past it into this thread?

Kind regards

AJ
Customer: replied 2 years ago.

Hi AJ,


 


I cannot copy and paste my copy as its pdf but here is a link to the application form on their website:


 


http://www.brandontoolhire.co.uk/themes/brandon/downloads/Account_Application_Form.pdf


 


 


I could really do with an answer to my above asap as I need to get to the court.


 


Many thanks


 


 

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

When you signed it did you cross out the words proprietor?

This is drafted as a guarantee but reading it entirely in this context I would say it is potentially unenforceable as it lacks valid consideration. It is not a condition of the hire and is not incorporated into the terms of the agreement. It is therefore not enforceable as a contract against you personally.

I look forward to hearing from you.

Kind regards

AK
Customer: replied 2 years ago.

Hi,


 


No, no words were crossed out at all and I didn't even know it was supposed to be personally against me. I just assumed it was I would personally as a director signing it make sure payments were made.


 


In the actual terms and conditions that are supplied there is no mention of any kind of personal guarantee either.


 


Is it possible to draft me a paragraph for an argument here. Also do you know of any relevant case law I can search for plus can elaborate what you mean by consideration from a legal point of view.


 


Can you also clarify that I couldn't possibly sign as a director and then they use that same signature for me personally?


 


Thanks


 


I think we are pretty much done then unless you can think of anything else.

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

The case law is a but difficult to get into because it relates to contractual construction. The concept is that if they are trying to show you are party to this agreement and have a legally enforceable obligation against you, there has to be an exchange of promises (this is known as contractual consideration) - you have promised to pay the debts of the company but there is not return to this. What they should have done is said "in consideration for you personally guarantee these liabilities they agree to lease the equipment" or something similar.

Furthermore to be party to the contract you have to sign it in your personal capacity - and obviously so, where you have clearly signed it as a director they cannot then say that you have then signed it in your personal capacity.

Kind regards

AJ
Customer: replied 2 years ago.

Ok, think I get that now thanks.

 

Just two things missed from above which are:

 

1. The claimant have said in their witness statement that the personal guarantee is separate to opening the account. They also said that I couldn't close the account even if I wanted to because I was no longer an officer of the company. Surely they can't have it both ways and say that I signed as a director but also personally all in one signature.

 

 

 

2. They have also provided a county court case where they won against another director and the judge agreed that it was signed so the director was liable from a personal point of view. This is worrying but am I right to say it is not a precedent as it has not come from a higher court. Also this is slightly different because the guy was still a director of the company whereas I resigned years ago thus cancelling out the term "My Company" on the gaurantee section.

 

3. Just found this and think it may be worrying:

 

"

In Brandon Hire Plc v Steven
Russell the director of a company
signed an application form in order
to obtain credit for the purchase of
equipment. The creditor claimed
that the application form also
created a personal guarantee on
the part of the director and sought
payment from the director under
this guarantee.

The term in question that
purportedly created the personal
guarantee was contained in a box
headed "Guarantee", stating "I
hereby personally guarantee
payment of all sums due from my
company".

The director claimed that, although
fair notice of the existence of this
clause had been given to him, fair
notice of 'its import' had not. He
believed he had signed in his
capacity as a director and had not
intended personally to bind himself.

The Court held that the clause was
binding on the company and the
director in his personal capacity.
The wording of the guarantee could
only be read as amounting to an
agreement by the director to
undertake personal liability for the
company's obligations.

"

 

Thanks

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

1. They have sued now, they cannot as a result incur further liabilities on the company and then seek to recover those from you. I would also say that even if the guarantee is found enforceable it would only cover what was order at that point, you could then incur further liability.

2. You are correct the county court is not subject to precedent. That is a valid point the fact that they have put the words director/proprietor seems to suggest the guarantee is conditional on you holding one of those offices.

Kind regards

AJ
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

That is the courts decision, but they did not seem to challange it for lack of consideration.

Also the facts as you say are different in your case as you are no longer a director.

Were you even a director when the liabilities were incurred?

Kind regards

AJ
Customer: replied 2 years ago.

Found this case online and think its the one they are using against me which says this. Its a little worrying.


 


"


In Brandon Hire Plc v Steven
Russell the director of a company
signed an application form in order
to obtain credit for the purchase of
equipment. The creditor claimed
that the application form also
created a personal guarantee on
the part of the director and sought
payment from the director under
this guarantee.

The term in question that
purportedly created the personal
guarantee was contained in a box
headed "Guarantee", stating "I
hereby personally guarantee
payment of all sums due from my
company".

The director claimed that, although
fair notice of the existence of this
clause had been given to him, fair
notice of 'its import' had not. He
believed he had signed in his
capacity as a director and had not
intended personally to bind himself.

The Court held that the clause was
binding on the company and the
director in his personal capacity.
The wording of the guarantee could
only be read as amounting to an
agreement by the director to
undertake personal liability for the
company's obligations.


"

Customer: replied 2 years ago.

Hi,


 


Yes, it is my thinking. It seems that they didn't really challenge much other than the director claimed he signed as a director and not personally and the judge seemed to just say that he should of known it meant him personally as well. Seems a little weak and open to argument I guess.


 


The liabilities were not there when I was a director and the account was always kept up to date. I resigned in 2010 and this debt relates to invoices from October 2011 to January 2012.


 


I also think it is unfair of the claimant to say that there was only a £500 credit limit but allow the company to run up a £9k debt and allow so many invoices to go overdue.


 


They claim that it is covered in its terms and conditions by saying that they may allow the credit limit to be exceeded and if so then it is for the company to make sure they reduce it back to the limit by the end of the month or so (something like that). Well I would argue that there is a massive difference between £500 and £9k.


 


Thanks

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

It does seem inequitable that they should be allowed to let the company run up a £9k debt when you agreed the guarantee on the premise of £500 credit.

There are three elements to this:
1. You wholly deny the guarantee and say it is unenforceable on the grounds of lack of consideration;

2. (This is really thinking outside the box) - You exercise the defence of promissory estoppel (See the High Trees House Case - Google it) - and say if the guarantee is enforceable - you relied on the company's promise, to your detriment, that no more than £500 credit would ever be incurred and therefore that would be the limit of your guarantee. This is a long shot and I would say point 1 would be the best way to go, but you could argue this as well.

3. You argue the guarantee is only enforceable for the period when you were director. In order to argue this you would have to prove that you gave them notice that you were no longer a director.

I look forward to hearing from you.

Kind regards

AJ
Customer: replied 2 years ago.

Hi,


 


Thanks for that.


 


I am typing this up now.


 


I signed the application on the side of the road with the account manager. I was given no time to read the t&c's if I chose to as the rep only had 5mins spare as he was passing and we needed the account to be opened to hire something for the next day so he said he would meet and rush it through.


 


Would this be covered under consideration or something else?


 


After that we can complete this I think.


 


Thanks

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

The lack of consideration point is that you have signed a guarantee that potentially is un enforceable as there is no exchange of promises for it.

The fact that you were not made aware of the guarantee potentially, as you mentioned makes it an unfair contract term.

I look forward to hearing from you and any feedback is gratefully received.

Kind regards

AJ

What Customers are Saying:

 
 
 
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
< Previous | Next >
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
 
 
 

Meet The Experts:

 
 
 
  • Jo C.

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
< Last | Next >
  • http://ww2.justanswer.com/uploads/EM/emus/2015-7-7_192327_bigstockportraitofconfidentfemale.64x64.jpg Jo C.'s Avatar

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
  • http://ww2.justanswer.com/uploads/BE/benjones/2015-12-1_0437_ennew.64x64.jpg Ben Jones's Avatar

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    11553
    Qualified Solicitor - Please start your question with 'For Ben Jones'
  • http://ww2.justanswer.com/uploads/BU/Buachaill/2012-5-25_211156_barrister5.64x64.jpg Buachaill's Avatar

    Buachaill

    Barrister

    Satisfied Customers:

    1754
    Barrister 17 years experience
  • http://ww2.justanswer.com/uploads/JO/jojobi/2013-3-19_0265_maxlowryphoto.64x64.jpg Max Lowry's Avatar

    Max Lowry

    Advocate

    Satisfied Customers:

    894
    LLB, 10 years post qualification experience
  • http://ww2.justanswer.com/uploads/UK/UKLawyer/2012-4-12_9849_F2.64x64.jpg UK_Lawyer's Avatar

    UK_Lawyer

    Solicitor

    Satisfied Customers:

    750
    I am a qualified solicitor and an expert in UK law.
  • http://ww2.justanswer.com/uploads/KA/Kasare/kasare.64x64.jpg Kasare's Avatar

    Kasare

    Solicitor

    Satisfied Customers:

    402
    Solicitor, 10 yrs plus experience in civil litigation, employment and family law
  • http://ww2.justanswer.com/uploads/OS/osh/2015-7-7_19268_gettyimagesb.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    8199
    LL.B (Hons), Higher Prof. Dip. Law & Practice