If you are entering into an agreement with multiple guarantors ensure that they all sign the document.
In the recent case of Harvey v Dunbar Assets PLC the Court unanimously rejected the enforcement of a multiple guarantor agreement on the basis that one of the guarantors had not signed it. In addition to this, the Court concluded that the rest of the guarantors were not bound by their signature on the document due to the missing signature. The Court concluded that a reasonable person would assume that they would not be bound by the document’s terms, unless all guarantors signed to confirm their agreement.
As the above case has demonstrated, this rule is applied strictly by the Courts and, therefore, it is imperative that you ensure that all guarantors sign on the line to ensure that they are all bound by the terms of the agreement, or, alternatively ensure that the document is drafted to counteract this. We therefore recommend that you instruct a solicitor to advise and assist with the drafting of these particular documents.
This provides more ammunition for challenging guarantees for guarantors.
If you require any assistance in drafting guarantor agreements, or challenging them Stephensons has a dedicated and experienced Commercial Litigation team that may be able to advise and assist you. Please call us now on 0175 321 6399 to discuss further.