Personal Guarantee (PG), Company Director’s PG & PG Debt - Guide - Page 1
We have divided our Basics & FAQs on Personal Guarantees into two different pages so that you won’t be overwhelmed with details. Please read the next page for more information & other FAQs that may help you understand Personal Guarantees & Director’s Personal Guarantee in more detail format.
What is a Personal Guarantee?
Legal Requirements for a Personal Guarantee
The factors that courts take into account are:
Proper Interpretation
“Contracts of Guarantee are interpreted as a whole”. It is the particular words used in the relevant clauses that count. Not what it is called.
Title of document:
Substance over form:
Form of guarantees:
Signed:
Secondary Liability:
Consideration:
What Makes Personal Guarantees So Special?
They expose themselves to the liability of the contract for no return.
Guarantors promise that they will make good to a creditor failure by the primary contracting party to perform the contractual obligations.
How Long is a Personal Guarantee Enforceable?
This means two things:
When Do Personal Guarantees Become Unenforceable?
In the worst case, they only become unenforceable after the relevant “limitation period” expires.
The general law rules are:
Defences: How to Get Out of a Personal Guarantee
Some of the more common ways guarantors get out of a personal guarantee include:
The creditor repudiated the contract of guarantee, and the guarantor accepts the repudiation
Examples of Guarantees:
The Unfair Contract Terms Act 1977 applies to relieve the guarantor of onerous terms of the guarantee.
Reduction of Amounts Owed
Breach of an “implied term” of the contract to take reasonable care to ensure that the price at which property is sold is the best price that can be reasonably obtained for the security given under the guarantee.
- Proper Interpretation of Guarantees
- Interpreting Guarantees: Loopholes
- Example Guarantee
- Personal Guarantee on a Business Loan
- Directors’ Personal Guarantees
- Recovery by Creditor from Guarantor
- Unlimited Personal Guarantee
- Differences between Guarantees and Indemnities
- Challenging Personal Guarantees
- Mounting Business Debt and Personal Guarantee Support
You can contact us on 0203 318 0990 / 0208 568 9687 for a free and no-obligation personal appointment to discuss your full case of director loans with Personal guarantees and if your business is unable to pay off business debt liability.