Legal issues
Possible issues include execution and form, interpretation, incorporation of other documents, capped liability, continuing guarantees, joint-and-several liability, conditions precedent, demand requirements, material variation of the underlying obligation, release, limitation and the validity or amount of the company debt itself.
Where security exists, enforcement of the guarantee and security should be analysed together.
Evidence that matters
Obtain the signed guarantee, underlying facility or supply agreement, every later variation, statements, demands, notices, security documents, correspondence, payment history and documents showing what happened to the company debt.
Reasonable lines of enquiry
Compare the creditor's demand with the exact contractual trigger. Check the amount, cap, dates, variations and any representations made when the guarantee was signed. Identify whether the creditor has already recovered sums from the company or security.
What happens next
The guarantor may respond to a demand, negotiate, seek documents or dispute liability. If proceedings are issued, a defence must be filed within the applicable timetable. If judgment is entered, the creditor may seek enforcement against personal assets.
Immediate steps
Do not admit personal liability before locating the complete signed guarantee and underlying agreement. Preserve all versions and amendments and record any court or demand deadline immediately.
What should you send us?
Send the signed guarantee, underlying agreement, variations, statements, demands, security documents, insolvency papers and all relevant correspondence.