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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3695
Experience:  Solicitors 2 years plus PQE
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I am in the county courts this afternoon defending against

Resolved Question:

I am in the county courts this afternoon defending against a claim under a PG agreement.
In march 2012, as a director of a company (now in liquidation) i entered into a credit supplier agreement on behalf of the business. They presented me with a PG drawn up by them. I signed it. The credit account was completed in the name of SpineLock UK Ltd, the PG was presented to me in the Name of SpineLock Group. I provided the supplier with a copy of my business letterhead which clearly shows SpineLock UK Ltd, and SpineLock Group (Irl) Ltd, with registration numbers and registered office addresses. SpineLock UK all orders were placed by SpineLock UK Ltd, all Invoices were presented to SpineLock UK and all payments were made by SpineLock UK. SpineLock UK has gone under but SpineLock Group (Irl) has not. It the PG is enforceable i believe it would only be against and debt incurred by SpineLock Group not SpineLock UK. am i correct
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.
Alex J. :

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. Are you sure this is not a parent guarantee not a personal one?

Alex J. :

What does the signature clause of guarantee say?

Customer:

It is definitely a personal guarantee, the other side have accepted there is an error in the name, but are asking the judge to accept that the agreement should stand against me for debt left from SpineLock UK in liquidation. I am arguing that they provided the document from all the information freely given at the time, they requested the agreement to be against SpineLock Group, not me.

Alex J. :

Hi, Thank you for your question and welcome. What company number have they got?

Customer:

Spinelock UK is 08219660 and Spinelock Group is 516935

Alex J. :

It is an accepted principle under the Statute of Frauds 1677(Old law but good law still) - that a person cannot be held liable for another party's debts unless agreed in writing.

Alex J. :

So basically they have put the wrong name and number on the document?

Customer:

Yes

Alex J. :

Are you a director of Spinelock Group?

Alex J. :

I would be very surprised if the law of mistake applies here.

Customer:

Not anymore i resigned 2 months ago

Alex J. :

They have an obligation to get this right as it is in the course of business not in a consumer relation.

Customer:

what do i tell the judge to clarify my position please

Alex J. :

Hi, I would tell the Judge:

Alex J. :

1. This was a business to business arrangement;

Alex J. :

2. You signed a guarantee for the parent company's debt;

Alex J. :

3. It is not your fault that they sent you the wrong guarantee;

Alex J. :

4. The court does not have discretion to invent a new guarantee obligation in relation to the debts of an entirely different legal entity;

Alex J. :

5. Any guarantee for the liquidated company's debts must fail as it does not meet the criteria of the Statute of Frauds;

Alex J. :

6. You cannot be held liable for the carelessness and ineffective credit control of the claimant.

Alex J. :

7. Ask for the claim to be struck out under Civil Procedure Rule 3.4 on the basis that "the statement of case discloses no reasonable grounds for bringing the claim".

Customer:

Thanks Alex, i feel a little calmer now

Alex J. :

No problem. I would strongly recommend you go and get a solicitor to help you through this. You will be able to reclaim the costs if you successfully defend it and it will add gravitas to any arguments with the claimant as the claimant will then know you are being properly advised and wont try and bully you.

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