Is a Personal Guarantee right for you?

It is important to consider when undertaking works or suppling goods to your customers that they have the means and the ability to pay you.

If you deal with Companies on a regular basis then you should consider obtaining a Personal Guarantee from the Company’s Director to help protect your position should the worst happen and the Company you are trading with is unable to pay your debts.

This is even more important with the economic climate as it is at the moment.

A Personal Guarantee can provide an alternative option to recover outstanding monies owed by a Company if the Company is unable to pay their debts or even becomes insolvent and enters into Liquidation or Administration.

A Personal Guarantee is an individual’s legal promise to repay credit issued to a business for which they are an executive or partner.

Providing a Personal Guarantee means that if the business becomes unable to repay the debt, the individual assumes personal responsibility for the balance.

The Guarantee must be in writing and it must be signed by the guarantor in the guarantor’s personal capacity.

A personal guarantee is not enforceable without consideration.

As a personal guarantee is a type of contract it is an enforceable promise.

The enforceability of a contract comes from one party’s giving of “consideration” to the other party.

Consideration being something that has value usually a ‘benefit’.

We can provide more detailed advice in relation to this and offer the service to draft this document for you at very competitive rates so get in touch to see if we can help you today.

Contact the Commercial and Business Debt Recovery Solicitors Lane & Co (laneandcosolicitors.com)

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