This is another in our occasional series of articles concerning personal guarantees.
This a requirement of the Statute of Frauds ( which is reproduced in different legislation in each state).
Two Guarantors – only one signs
- A common situation is where 2 directors of a company are required to sign a personal guarantee but one signs and one doesn’t.
- A well drafted Personal Guarantee will say that the person who signed is liable even if their fellow director did not sign.
- In other circumstances, it might be a condition precedent that the guarantee does not come into effect until all of the guarantors have signed.
- There have been instances where guarantees have been set aside on the grounds that it was misrepresented to the person signing that someone else had also signed a guarantee for the debt, when they had not.