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Stupid Mistake - Any way out ?
Hi
I've made a very bad mistake and I'm hoping that there might be a legal argument I can use to get myself out of it (other than pleading stupidity !)
It appears that I have signed as a guarantor for a business lease, when I thought I was simply signing as a witness to the director's signature on his guarantee document.
There were papers and contracts all over the table, and at no time did anyone explain to me exactly what it was that I was signing. I was simply asked to sign here.
I know this was really dumb, but surely they (the representative of the leasing company) had a legal obligation to explain to me exactly what it was that I was signing and to suggest that I take legal advice?
They are now coming after me for the money as the company has gone into liquidation and I have a court hearing for directions next week.
Would greatly appreciate any help that anyone can give me. Thanks.
I've made a very bad mistake and I'm hoping that there might be a legal argument I can use to get myself out of it (other than pleading stupidity !)
It appears that I have signed as a guarantor for a business lease, when I thought I was simply signing as a witness to the director's signature on his guarantee document.
There were papers and contracts all over the table, and at no time did anyone explain to me exactly what it was that I was signing. I was simply asked to sign here.
I know this was really dumb, but surely they (the representative of the leasing company) had a legal obligation to explain to me exactly what it was that I was signing and to suggest that I take legal advice?
They are now coming after me for the money as the company has gone into liquidation and I have a court hearing for directions next week.
Would greatly appreciate any help that anyone can give me. Thanks.
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A few questions which may assist...
How did it come about you signing anything?
Were any solicitors involved or what it just done directly between the company and leasing company?
Were you in the vicinity and called in as a "witness" or were you called in officially to sign, if the latter, what was the reason stated and do you have it in writing eg a letter from a solicitor asking you to come in and xxx.
Who was present when everything was signed?
Was the execution clause clear you were signing in your own right or as a witness? Did you read it or query anything?
Did you work for the company and, if so, in what capacity or did you have any relationship with anyone in the company, if so, what to who, especially to the actual directors and more specifically those who signed the lease.
Did you have any discussion with anyone at any point about the possibility of being a guarantor? Was it verbal/written/both?
What is your financial situation? Are you in such a financial position that you would be a suitable guarantor? Are you aware of any checks being done on you or did you provide any information such as your details, which could be used for a credit check or were you asked to provide any financial records or similar?
How did it come about you signing anything?
Were any solicitors involved or what it just done directly between the company and leasing company?
Were you in the vicinity and called in as a "witness" or were you called in officially to sign, if the latter, what was the reason stated and do you have it in writing eg a letter from a solicitor asking you to come in and xxx.
Who was present when everything was signed?
Was the execution clause clear you were signing in your own right or as a witness? Did you read it or query anything?
Did you work for the company and, if so, in what capacity or did you have any relationship with anyone in the company, if so, what to who, especially to the actual directors and more specifically those who signed the lease.
Did you have any discussion with anyone at any point about the possibility of being a guarantor? Was it verbal/written/both?
What is your financial situation? Are you in such a financial position that you would be a suitable guarantor? Are you aware of any checks being done on you or did you provide any information such as your details, which could be used for a credit check or were you asked to provide any financial records or similar?
Hi Jenna
Many thanks indeed for your response. To answer your questions:
How did it come about you signing anything?
******************
I worked for the company and we (the company director and myself) were sitting outside having a drink when the representative of the leasing company arrived. He just put all the papers on the table and started asking for signatures. I had no prior dealings with them on this matter at this point.
******************
Were any solicitors involved or what it just done directly between the company and leasing company?
*************
No solicitors were involved as far as I am aware
*************
Were you in the vicinity and called in as a "witness" or were you called in officially to sign, if the latter, what was the reason stated and do you have it in writing eg a letter from a solicitor asking you to come in and xxx.
***************
There is nothing in writing asking me to sign anything. I was already there (sitting with the director having a drink) and I thought I was simply signing as a witness.
***************
Who was present when everything was signed?
***************
The company director, the representative of the leasing company and myself. No one else.
***************
(remainder of text to follow as this is too long now to post all in one)
Many thanks indeed for your response. To answer your questions:
How did it come about you signing anything?
******************
I worked for the company and we (the company director and myself) were sitting outside having a drink when the representative of the leasing company arrived. He just put all the papers on the table and started asking for signatures. I had no prior dealings with them on this matter at this point.
******************
Were any solicitors involved or what it just done directly between the company and leasing company?
*************
No solicitors were involved as far as I am aware
*************
Were you in the vicinity and called in as a "witness" or were you called in officially to sign, if the latter, what was the reason stated and do you have it in writing eg a letter from a solicitor asking you to come in and xxx.
***************
There is nothing in writing asking me to sign anything. I was already there (sitting with the director having a drink) and I thought I was simply signing as a witness.
***************
Who was present when everything was signed?
***************
The company director, the representative of the leasing company and myself. No one else.
***************
(remainder of text to follow as this is too long now to post all in one)
Was the execution clause clear you were signing in your own right or as a witness? Did you read it or query anything?
***************
I was just given a single page to sign which was under a few other papers. Stupidly I signed it without reading it. I wouldn't have been able to read it anyway as the print was very small and we were in very bright sunlight and I didn't have my reading glasses with me. I have now had a chance to see it and it is a seperate guarantee document. I didn't query anything.
***************
Did you work for the company and, if so, in what capacity or did you have any relationship with anyone in the company, if so, what to who, especially to the actual directors and more specifically those who signed the lease.
***************
I was the company secretary and a minority shareholder in the company. I didn't have any duties, I simply had the title because the role had to be filled and it was a very small company. The actual lease was signed by the managing director. I didn't sign that.
***************
Did you have any discussion with anyone at any point about the possibility of being a guarantor? Was it verbal/written/both?
***************
No, there were no discussions along these lines at all.
***************
What is your financial situation? Are you in such a financial position that you would be a suitable guarantor? Are you aware of any checks being done on you or did you provide any information such as your details, which could be used for a credit check or were you asked to provide any financial records or similar?
**************
Yes, I am in a better financial position than the director. That is why they are coming after me I guess. I provided no details, but my name and address were a matter of public record at the company due to my position.
Thank you for your help on this...
***************
I was just given a single page to sign which was under a few other papers. Stupidly I signed it without reading it. I wouldn't have been able to read it anyway as the print was very small and we were in very bright sunlight and I didn't have my reading glasses with me. I have now had a chance to see it and it is a seperate guarantee document. I didn't query anything.
***************
Did you work for the company and, if so, in what capacity or did you have any relationship with anyone in the company, if so, what to who, especially to the actual directors and more specifically those who signed the lease.
***************
I was the company secretary and a minority shareholder in the company. I didn't have any duties, I simply had the title because the role had to be filled and it was a very small company. The actual lease was signed by the managing director. I didn't sign that.
***************
Did you have any discussion with anyone at any point about the possibility of being a guarantor? Was it verbal/written/both?
***************
No, there were no discussions along these lines at all.
***************
What is your financial situation? Are you in such a financial position that you would be a suitable guarantor? Are you aware of any checks being done on you or did you provide any information such as your details, which could be used for a credit check or were you asked to provide any financial records or similar?
**************
Yes, I am in a better financial position than the director. That is why they are coming after me I guess. I provided no details, but my name and address were a matter of public record at the company due to my position.
Thank you for your help on this...
-- answer removed --
Ok Do you have a copy of the guarantee to check the terms eg any limitation on the guarantee in terms of amount or time limit? It is common though for liability to last until the end of the term of the lease.
Are you the only personal guarantor, if not then are debts joint and several?
Has the lease been forfeited through the insolvency? What is it the leasing agents are claiming for, rent arrears or other sums as well? In any event, has anything been sorted so further sums are not accruing?
Was any rent deposit deed put in place which could provide a fund for arrears or any insurance policies? The receiver should deal with the companies assets as regards creditors so make sure you keep in close contact with them as regards any sums being requested from you.
Some general advice about insolvency here...
http://www.business-support-wales.gov.uk/pdf/I nsolvency.pdf
Are you the only personal guarantor, if not then are debts joint and several?
Has the lease been forfeited through the insolvency? What is it the leasing agents are claiming for, rent arrears or other sums as well? In any event, has anything been sorted so further sums are not accruing?
Was any rent deposit deed put in place which could provide a fund for arrears or any insurance policies? The receiver should deal with the companies assets as regards creditors so make sure you keep in close contact with them as regards any sums being requested from you.
Some general advice about insolvency here...
http://www.business-support-wales.gov.uk/pdf/I nsolvency.pdf
Hi Jenna
Ok Do you have a copy of the guarantee to check the terms eg any limitation on the guarantee in terms of amount or time limit? It is common though for liability to last until the end of the term of the lease.
********************
I do have a copy and there are no limitations on it at all, I'm afraid.
********************
Are you the only personal guarantor, if not then are debts joint and several?
*******************
The director also signed a separate personal guarantee.
*******************
Has the lease been forfeited through the insolvency? What is it the leasing agents are claiming for, rent arrears or other sums as well? In any event, has anything been sorted so further sums are not accruing?
*******************
Yes, the leased equipment has been forfeited. They are seeking the remainder of the outstanding balance for the full term of the lease.
*******************
Was any rent deposit deed put in place which could provide a fund for arrears or any insurance policies? The receiver should deal with the companies assets as regards creditors so make sure you keep in close contact with them as regards any sums being requested from you.
*******************
Sorry, I think I have confused things a little here. It was not a lease on a property but a lease on equipment. There isn't going to be a lot left for the creditors I'm afraid.
*******************
Thanks again for all your help here.
Ok Do you have a copy of the guarantee to check the terms eg any limitation on the guarantee in terms of amount or time limit? It is common though for liability to last until the end of the term of the lease.
********************
I do have a copy and there are no limitations on it at all, I'm afraid.
********************
Are you the only personal guarantor, if not then are debts joint and several?
*******************
The director also signed a separate personal guarantee.
*******************
Has the lease been forfeited through the insolvency? What is it the leasing agents are claiming for, rent arrears or other sums as well? In any event, has anything been sorted so further sums are not accruing?
*******************
Yes, the leased equipment has been forfeited. They are seeking the remainder of the outstanding balance for the full term of the lease.
*******************
Was any rent deposit deed put in place which could provide a fund for arrears or any insurance policies? The receiver should deal with the companies assets as regards creditors so make sure you keep in close contact with them as regards any sums being requested from you.
*******************
Sorry, I think I have confused things a little here. It was not a lease on a property but a lease on equipment. There isn't going to be a lot left for the creditors I'm afraid.
*******************
Thanks again for all your help here.
What was the equipment?
How much was it?
Who supplied it?
Who introduced the company to the leasing company?
Which leasing company is it?
You need get hold of a copy of the original application form.
The application form is the key here.
Either your fellow director was asked and agreed that you would be credit searched, or the equipment salesperson has put you on the application form on his own.
How much was it?
Who supplied it?
Who introduced the company to the leasing company?
Which leasing company is it?
You need get hold of a copy of the original application form.
The application form is the key here.
Either your fellow director was asked and agreed that you would be credit searched, or the equipment salesperson has put you on the application form on his own.
What was the equipment?
**************
Hi .... it was a fire alarm system
**************
How much was it?
************
Just under $8000
************
Who supplied it?
************
A local company .... don't know the name
************
Who introduced the company to the leasing company?
*************
I believe it was the installer of the system
*************
Which leasing company is it?
*************
General Asset Management
*************
You need get hold of a copy of the original application form.
*************
Have no way of doing this, I'm afraid
*************
The application form is the key here.
*************
I would not have signed the application form for the system, for sure.
*************
Either your fellow director was asked and agreed that you would be credit searched, or the equipment salesperson has put you on the application form on his own.
*************
Hard to believe either of these scenarios .... prefer to believe it was a simple error somehow.
Many thanks for your help.
**************
Hi .... it was a fire alarm system
**************
How much was it?
************
Just under $8000
************
Who supplied it?
************
A local company .... don't know the name
************
Who introduced the company to the leasing company?
*************
I believe it was the installer of the system
*************
Which leasing company is it?
*************
General Asset Management
*************
You need get hold of a copy of the original application form.
*************
Have no way of doing this, I'm afraid
*************
The application form is the key here.
*************
I would not have signed the application form for the system, for sure.
*************
Either your fellow director was asked and agreed that you would be credit searched, or the equipment salesperson has put you on the application form on his own.
*************
Hard to believe either of these scenarios .... prefer to believe it was a simple error somehow.
Many thanks for your help.
No he is in the UK. General Asset Management are based near Brighton - we introduce a lot to them. Bad news is that they are a 'proper' company and their documents are legal and binding.
Contact General Asset Management and ask them for the application form that was given to them as you were never to be a guarantor.
GAM will have received an application form and conducted searches.
The original application form may have only had the director on, and GAM may have declined it, or spotted you as a shareholder. They would not have searched you unless you were on the application form. They may have originally declined the application but asked if your guarantee was available.
Some one (and it could only be the fire company or your director) has stated that you would be guarantor.
If GAM tell you that they can't supply you the application form, tell them that you believe fraud has taken place, and that if they don't suplpy it, you will be calling the police and a potential introducer of theirs is committing fraud.
GAM keep every single piece of data as they scan in all documents. It is easy for them to track the original application form.
Contact General Asset Management and ask them for the application form that was given to them as you were never to be a guarantor.
GAM will have received an application form and conducted searches.
The original application form may have only had the director on, and GAM may have declined it, or spotted you as a shareholder. They would not have searched you unless you were on the application form. They may have originally declined the application but asked if your guarantee was available.
Some one (and it could only be the fire company or your director) has stated that you would be guarantor.
If GAM tell you that they can't supply you the application form, tell them that you believe fraud has taken place, and that if they don't suplpy it, you will be calling the police and a potential introducer of theirs is committing fraud.
GAM keep every single piece of data as they scan in all documents. It is easy for them to track the original application form.
-- answer removed --
Hi
Yes, I am in the UK .... deal a lot with the States though, hence the $ sign slip. Meant to say �8,000.
I will try to get a copy of the application form from GAM. What if my name is on it though? Who would have had to sign it? The company director or the salesman?
From what you are saying, it looks like my name will have to be on the application form, but it won't have my signature on it, so where do I go from here?
Did the salesman have any obligation to tell me exactly what I was signing when I signed the personal guarantee form? Should he have advised me that it was a legally binding document on my part and I should seek the advice of a solicitor? Does he have any obligation to me to say anything like this?
Thank you both for all your help.
Yes, I am in the UK .... deal a lot with the States though, hence the $ sign slip. Meant to say �8,000.
I will try to get a copy of the application form from GAM. What if my name is on it though? Who would have had to sign it? The company director or the salesman?
From what you are saying, it looks like my name will have to be on the application form, but it won't have my signature on it, so where do I go from here?
Did the salesman have any obligation to tell me exactly what I was signing when I signed the personal guarantee form? Should he have advised me that it was a legally binding document on my part and I should seek the advice of a solicitor? Does he have any obligation to me to say anything like this?
Thank you both for all your help.
A bit of a gray area. We deal with GAM a lot - but we rarely sign customers up directly. When we send out documents, we make clear on the letter exactly what the terms are and who needs to sign and where.
The standard letter that GAM sends out is pretty similar - saying that if you are in any doubt, get legal advice.
To be honest, I don't think you have much chance of fighting the signing of the document. You are a shareholder of a company and as such should read any documents before signing them.
The application form may not have initially had your details on (which I suspect). They may have been added later (after GAM originally declined the proposal).
The standard letter that GAM sends out is pretty similar - saying that if you are in any doubt, get legal advice.
To be honest, I don't think you have much chance of fighting the signing of the document. You are a shareholder of a company and as such should read any documents before signing them.
The application form may not have initially had your details on (which I suspect). They may have been added later (after GAM originally declined the proposal).
I cannot remember the case and my books are at home - but there was a case where a wife signed a third party security to secure her husband's debt to a bank. The court ruled that because she did not have independent legal advice the security was void. Consult a solicitor, but if the facts are as you state I think you have a good chance of having the guarantee set aside.
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