Pursued for funds I didn't personally guarantee

Discussion in 'Legal' started by DavidG92, Feb 11, 2019.

  1. DavidG92

    DavidG92 UKBF Newcomer Free Member

    12 0
    I'm not entirely sure what you get out of patronising, smart and unhelpful comments, but I'd really appreciate it if you kept those to yourself. I'm not here to be humiliated, or made to feel even more frustrated than I already do. Surely it crossed your mind that I've done enough self-loathing over this, so there's no need for you to fuel the fire with your childish remarks.
    Posted: Feb 12, 2019 By: DavidG92 Member since: Feb 11, 2019
  2. The Byre

    The Byre UKBF Ace Free Member

    9,259 3,670
    I most certainly did cross my mind, but I have to deal with people who make mistakes all the time. It comes with the territory of running a business. I made that comment, not for your benefit, but for the benefit of the many, many people who browse this forum, looking for tips, tricks, pitfalls and possibly wisdom.

    I apologise for my bluntness, but the years have taught me that directness is the best tactic. I have just come out of a meeting, in which I had to justify pulling the plug on a small business, thereby putting three people out of work. It was making a profit, but not enough to justify the investment and resources allocated. They have had several years to pull their collective fingers out, but have failed to do so. They also refuse to see a lawyer or an accountant and get shirty when I say that they should.

    I went into that meeting just after writing that small piece about the true nature of what a promissory note really is. I couldn't help thinking of you, as they insisted that they need neither accountant, nor lawyer. It is not good business practice for an investor (i.e. me) or other entity in a strong position to do business and exchange contracts with people who are completely out of their depth and have received no proper legal guidance, other than what I tell them. That kind of situation can blow-up in my face.

    Therefore - Your best hope is the very unequal nature of the parties and the fact that the brewery insisted on the PN, knowing full-well that you and the other three had totally failed to grasp the true nature of what you were signing.

    The Unfair Contract Terms Act of 1977 may mitigate your dilemma, in that a case of unequal bargaining powers and the use (I assume) of a standard (take-it-or-leave-it) contract was offered. Also in such situations, it is customary for the stronger party to add a cause in which you sign a declaration that you have received proper legal guidance from a suitably qualified person.

    A court may use that act to find that your promissory note was just a piece of paper and no more. It may find that the terms of the agreement failed to meet the common law requirement for reasonableness.

    Were I the brewery and knowing that nether you nor the other two have two brass ha'pennies to rub together and that the brewery acted in the knowledge that the weaker party was without proper legal guidance, I would chalk it up to experience and give the person responsible a smack behind the left ear with a dead haddock.

    Just remember the words of HG Wells, "Today's emergency is tomorrow's joke!"
    Posted: Feb 12, 2019 By: The Byre Member since: Aug 13, 2013
  3. deniser

    deniser UKBF Legend Free Member

    8,104 1,702
    From the Brewery's point of view, if they were serious about getting a water tight personal guarantee, they would have had to get you to sign it as a deed ie. witnessed by an independent person and advised you to seek independent legal advice and prove that they had done so.

    So the promissory note has got to be a less enforceable document than a properly executed PG. It has the status of a contract in law.

    As Byre says, you will have to rely on the inequalities of the parties and you not knowing what you were signing.

    You need to be a bit careful though because your actions could be seen as fraudulent. What kind of hold over you did the Second Defendant have to get you to do this? What was in it for you? It seems a strange thing to do for another person.
    Posted: Feb 13, 2019 By: deniser Member since: Jun 3, 2008
  4. deniser

    deniser UKBF Legend Free Member

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    PS And of course the vagueness of the PN. That is probably your best defence. If that is really all it says then on the face of the document it wouldn't seem to be precise enough to be a contract which can be upheld. It doesn't specify the consideration or any terms or what it relates to.
    Posted: Feb 14, 2019 By: deniser Member since: Jun 3, 2008