Patricia Pearl - Small Claims Procedure - A Practical Guide


An excellent guide for the layperson in how to use the County Court - a must if you are intending to start a claim.

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  1. #1
    Basic Account Holder Nick wheatley Novitiate

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    Default Liability Personal Gurantee ~ Screwfix Direct

    Hi Peter

    I realise that this is quite an old post, but I have recently received the very same letter from screw fix solicitors with the same guarantee wording signed by me. Could you let me know how you got on with your defence as I am about to reply using the wording given in reply to your post.

    Many thanks

    Nick


  2. #2
    Basic Account Holder Nick wheatley Novitiate

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    Default Liability Personal Gurantee ~ Screwfix Direct

    Hi,

    I am new to the forum and discovered this site whilst looking for advice. I received a letter this morning from solicitors chasing an unpaid account which related to a company I was previously a Director of. They enclosed a copy of the credit application form which I had signed back in 2009 and stated that I was personally liable for the debt given the wording. the company has since gone into liquidation however I have resigned prior to this and resigned from the board also, albeit a month prior to the companies demise.

    I have looked at similar posts within the forum and planned to respond as detailed below, but would appreciate any advice in this respect as I suspect this may not be the last letter I receive.
    I am in receipt of your letter dated 27th April and refute your claim that I am personally liable for the unpaid invoice you refer to in your letter on the following grounds.

    1. Misrepresentation - the document is headed 'Credit Account Application Form' and for it to be a Personal Guarantee is misrepresentation by creditor.
    2. I did not sign the Application Form in a personal capacity but as a Director of xx Limited. It is further submitted that if this Application Form is found to be a guarantee it has an unreasonable indemnity clause within the meaning of the Unfair Contract Terms Act 1977 (”the 1977 Act”). The form that is the subject of this guarantee was between the Claimant and xx Ltd. My involvement as a guarantor was purely a personal matter between myself and xx Ltd.
    3. My trade or profession is not that of guarantor and I did not provide this guarantee in return for a fee or commission. It is therefore submitted that I was ”dealing as a consumer” within the meaning of section 12 of the 1977 Act (R & B Customs Brokers Company Ltd v United Dominions Trust Ltd [1987] EWCA Civ 3).
    4. As a result of the above case, the guarantee must be reasonable and it is submitted that the guarantee does not meet the reasonableness test of section 11 of the UCTA1977 Act and it is noted that by subsection (5) that it is for those claiming that a contract term or notice satisfies the requirement of reasonableness to show that it does.
    5. It is my belief that the guarantee does not meet the reasonableness test for the following reasons.
    a. I had no intention of entering into a personal guarantee
    b. What is purporting to be a personal liability is incorporated in the body of a document which is clearly designed to impose liability on MARS (Construction) Limited and not myself personally.
    c. It has been shown above that I am a consumer in this case. Under the Unfair Terms (Consumer Contract) Regulations 1999 (regulation 8) an unfair term is not binding on the consumer and therefore I cannot be held liable for the xx Limited debt.
    d. Under regulation 5(1) of the UTCCRicon a contractual term that is not individually negotiated will be regarded as unfair if, contrary to the requirements of good faith, it causes a significant imbalance in the parties rights and obligations arising under the contract, to the detriment of the consumer. The Application Form was clearly pre-printed and was a standard form of the Claimant and therefore cannot have been individually negotiated. By trying to pass the liability of a third party to myself, without my knowledge, there has clearly been a imbalance in the parties rights and is to the detriment of myself financially.

    Given the above I consider the matter closed and request that you withdraw your claim in writing by return.
    Any advice you can give would be appreciated as I am worried what may be in store for the coming months.

    Nick

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  3. #3
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    Default Re: Liability Personal Gurantee ~ Screwfix Direct

    Hi Nick,

    I have seen and heard of so many of this type of agreement / PG used not only by Screwfix and associated companies but many builders merchants and the like.

    The wording IMHO is misleading, detrimental to the signee and should be subject to scrutiny by the OFT. I know personally of one 25 year old secretary that signed the form as an application for her employer in the capacity as an authorised person to do so on behalf of the company, who 6 months later left the company, for the company to liquidate 3 years later, and for these lowlifes to seek a claim in default (moved address) and ICOicon on her house for a debt incurred by her employer - some 27k worth inc charges.

    These types of agreement need binning and I can only suggest that companies do not signicon with the suppliers that word as such a credit app form.

    You seem well versed in the legal standing, it is certainly my understanding that the question of capacity should be litigated, and I wish you well in your own case, and please post any conclusion to this, as you certainly will help others.

    All the best

    N


  4. #4
    Basic Account Holder Nick wheatley Novitiate

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    Default Re: Liability Personal Gurantee ~ Screwfix Direct

    Hi N

    Thanks for your reply. I agree with your thoughts, and I have learnt a very valuable lesson as my time as a director. Unfortunately, my understanding of the legal ramifications may be misleading as I have taken most of the wording of my letter from advice given within another post, credit I believe is owed to "toddle2u".

    I am very concerned personally as I had signed a number of credit account applications in my role and believe this may be the start of many letters of this nature. To this end I am looking for any advice I can get with a view to defending my position.

    Many thanks for your reply

    Nick


  5. #5
    Basic Account Holder onthefloor Novitiate

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    Default Re: Personal Guarantee Validity

    Hi Nick
    I wish it was good news, but in my case it is not. They took me to court and a hearing date was set. I agreed to arbitration and they did as well. I have to say that the process was not a lot of use really. The arbitrator just told me how good a case Screwfix believed they had and confirmed that they would proceed to court if I did not settle. My arguments seemed to fall upon deaf ears and I very much got the impression that I should make a offer to settle, as Screwfix were saying that if it went to a hearing they would seek extra costs from me. In the end I made a offer and they settled and the cheque went off the next week.
    I did use all the arguments that had been post on this site, but received a very long solicitors letter challenging each one.
    Like I said, not good news really, but I did manage to settle for less than they were originally asking for, but I do sometimes wish I had gone for my hour in court really.
    Regards

    Peter


  6. #6
    Basic Account Holder Nick wheatley Novitiate

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    Default

    Hi Chris

    Sorry to hijack your post but I also find myself in a very similar situation. I received l letter yesterday from solicitors representing screwfix. I had signed a credit application form as a director of the business with the wording "I confirm that we have read and agree to the terms and conditions supplied to us by screwfix direct ltd. I the director, agree to guarantee performance of all the company's financial obligations to screwfix direct ltd and it's subsidiaries"

    Like you, I also resigned from the company and the board prior to the company's demise.

    Again, the letter made reference to a personal guarantee made by me which given the circumstances I believe is gross misrepresentation. I was planning to reply using the wording you have suggested, however speaking with another user who did the same, apparently just received a long letter in reply contesting each of the points.

    I would very much like to hear of your progress as I suspect I may receive more letters from other suppliers.

    Many thanks

    Nick

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  7. #7
    Basic Account Holder Nick wheatley Novitiate

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    Default Re: Personal Guarantee Validity

    Hi Peter,

    Thanks for your reply, having searched online, this appears to be a real issue, and I feel like a bit of a mug now not having read the small print, a lesson in life I may learn to my detriment. It feel very strongly that I have been mislead in this respect but without paying out for legal fees, I feel my only option may be to pay up. My only real concern is what others I may receive from here on in as I am aware I signed more than one application in my time on the board.

    Thanks again for your time taken to reply, it helps somewhat knowing I'm not on my own!

    Nick


  8. #8
    Basic Account Holder Nick wheatley Novitiate

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    Default Re: Personal Guarantee Problem

    Hi guys

    Sorry to hijack your post, but I have found myself in a very similar situation as of yesterday morning. I had signed a credit application form back in 2009, a copy of which I have attached for your information. I since resigned from the company and the board of directors before the company went into liquidation and now find myself being chased by solicitors for the outstanding account stating I had entered into a personal guarantee.

    I did not believe at the time this is what I was doing and felt my liability only extended to my capacity as a company director, not as that of an individual.

    Given the wording in the document and the fact that I left the company prior to its demise, do I have a leg to stand on?

    I have been given 14 days to pay up or they have threatened legal proceedings!

    I am a complete novice when it comes to legals and I would really appreciate any help you can give.

    Yours in desperation,

    Nick

    Screwfix Personal Guarantee.jpg


  9. #9
    Basic Account Holder Nick wheatley Novitiate

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    Default Re: Personal Guarantee Problem

    Screwfix Personal Guarantee.jpg

    Hi Toddle2U

    You make reference in your reply above "This does not contain all or the crucial arguments I was able to use as the forms you have signed are more stringent and clearly defined with regards to bring the PG to the attention of the person signing."

    I have signed a similar Credit Account Application form whereby the heading was CONFIRMATION OF ACCEPTANCE. The wording beneath read "I confirm that we have read and agree to the terms and Conditions supplied to us by Screwfix Direct Ltd. I the director, agree to guarantee performance of all the company's financial obligations to Screwfix Direct Ltd and it's subsidiaries"

    The company I worked for has since gone into liquidation and I am now being pursued for the unpaid balance despite having left the employ of the company and the board prior to its demise. Does my case have any potential for some of the crucial arguments you make reference to?

    I have posted all over the forum yesterday and today, but to no avail. I have 14 days in which to pay the debt by which time I will be served with legal action.

    I really would appreciate some help if you have the time.

    Kind regards

    Nick


  10. #10
    Basic Account Holder Nick wheatley Novitiate

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    Default Hi folks, HELP!

    Hi Folks

    I am new to the forum and unfortunately have joined out of desperation and panic!

    I was previously a Director of a company wherby I signed a number of Credit Application forms to trade suppliers. I left the company and resigned from the Board in February this year and shortly afterwards the company went into liquidation, coincidently I might add.

    I have now received a letter demanding payment on an unpaid account where the solicitors are inferring I have made a personal guarantee. The document I signed certainly does not imply this although the wording guarantee is included beneath the heading Confirmation of Acceptance.

    I am a little unsure how to respond and any advice would be very much appreciated. The letter is dated 27th April 2012 and I have been told that if I do not pay in 14 days, they will issue legal action.

    Can anyone assist??

    I have attached the credit application for your reference.

    Kind regards

    Nick

    Screwfix Personal Guarantee.jpg


  11. #11
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    Default Re: Hi folks, HELP!

    Why the new thread Nick.

    Please keep to your original thread.


  12. #12
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    Default Re: Liability Personal Gurantee ~ Screwfix Direct

    threads merged to the business forum

    dx


  13. #13
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    Default Re: Liability Personal Gurantee ~ Screwfix Direct

    Quote Originally Posted by dx100uk View Post
    threads merged to the business forum

    dx
    Ta!!


  14. #14
    Basic Account Holder Nick wheatley Novitiate

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    Default Re: Liability Personal Gurantee ~ Screwfix Direct

    Sorry Brigadier,

    I wasn't sure if I was appealing to the right people being new to the forum. I posted it in legal issues originally and then again as part of an introduction as the reasons for why I joined.

    Sorry


  15. #15
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    Default Re: Liability Personal Gurantee ~ Screwfix Direct

    Not a problem my colleague has merged the threads, it helps
    us keep up with events get the advice from the right source.


  16. #16
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    Default Re: Liability Personal Gurantee ~ Screwfix Direct

    Nick

    Just to let you know I have merged all of your other posts from various threads to this one place, i.e. your thread.

    As has been said, please just stick to this one regarding your Screwfix Issue

    Thanks

    ims


  17. #17
    Basic Account Holder Nick wheatley Novitiate

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    Default Re: Liability Personal Gurantee ~ Screwfix Direct

    Hi ims21, Do you think I will be able to get any advice? My worry is that I have 14 days to pay before legal action will be served?


  18. #18
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    Default Re: Liability Personal Gurantee ~ Screwfix Direct

    Hi

    I am sure someone with knowledge will be along to help

    ims



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