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Category: Property Law
Satisfied Customers: 26
Experience:  Expert
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Nothing about property law but looking for some advise on an

Customer Question

Nothing about property law but looking for some advise on an agreement a car supplier sent me and expects me to sign ...
JA: What steps have you taken so far? Have you prepared or filed any paperwork?
Customer: No .. we currently have a master agreement thats been in situ for years .. but suddenly the owner of the business wants me to sign another agreement as a guarantee for £150k + vat
JA: Have you talked to a lawyer about this?
Customer: So the email she sent suggests I take legal advise
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: No I don't think so
Submitted: 20 days ago.
Category: Property Law
Expert:  Virtual-mod replied 20 days ago.

I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Expert:  J.Ustinovskaya replied 19 days ago.

Dear Client, thank you for your query. Could you please clarify what type of agreement the supplier wants you to sign? Is it a personal guarantee agreement? Are you signing it as a company or as an individual?

Customer: replied 19 days ago.
Good Morning .. its called a Guarantee & Indemnity. Its a personal guarantee agreement and Im' signing it as an individual
Customer: replied 19 days ago.
I am being chased to sign it today or they are telling me I won't be able to order anymore cars through them ...
Expert:  J.Ustinovskaya replied 19 days ago.

Do I understand correctly that you are a director of the company that buys cars from this supplier?

Customer: replied 19 days ago.
I own the company ..
Expert:  J.Ustinovskaya replied 19 days ago.

This is quite usual for creditors to request company directors to give a personal guarantee. The same would happen if, for example, you approached a bank for a loan or overdraft facility. The reason for this is that, if the company cannot pay its debts (received cars but not able to pay the supplier’s invoice), the shareholders of this limited company are only obliged to cover the amount that constitutes the unpaid part of their shares, if any, and this amount is usually either £0 or very small. So, the creditors (in your case the car supplier), to protect themselves, require directors to personally guarantee that the company’s debt will be paid from directors’ personal assets, if the company itself cannot cover its debt or pay the supplier’s invoice. Pease estimate carefully if you are happy to pay the company’s debt from your personal money. If yes, you can sign the Guarantee & Indemnity agreement.

Hope this helps.

Customer: replied 19 days ago.
Okay .. looks like I have to sign then if I want to continue to operate .. thanks for your help and have a good day