Personal Guarantee with Keyline Trade Account

[fourby16]

I completed a credit account application for an account with Keyline. I was a director of the company at the time but left the company last year. The company has recently gone into administration and Keyline are chasing me for payment of the outstanding balance as I was the only director that signed the form. The form as the following paragraph which is headed Credit Guarantee in the body of the form

 

"In consideration of your agreeing to supply goods to the applicant company on credit, we the undersigned being owner/director/directors of the applicant company jointly and severally guarantee payment of all the financial obligations.... etc etc"

 

But as far as I'm aware this is not a peronal guarantee and I note that in my defence I can use the following from one of the other posts on this subject:

 

1) Misrepresentation - the document is headed 'Credit Account Application Form' and for it to be a PG is misrepresentation by creditor

2) id not sign the Applciation Form in a personal capacity but as a Director of XXX 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 XXX Ltd. My involvement as a guarantor was purely a personal matter between myself and XXX 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.

6) I had no intention of entering into a personal guarantee

7) What is purporting to be a personal liability is incorporated in the body of a document which is clearly designed to impose liability on XXX Limited and not myself personally.

8) 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 XXX Ltd debt.

9) Under regulation 5(1) of the UTCCR 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.

 

My question is what else can I add in support that I was not a director at the time the company went into administration?

 

My thoughts are to add the above into a letter with a full and final settlement amount for about 20% of the balance?

 

Thanks in advance for any help

[debbbbsy]

If the agreement exists between the Ltd Co and Supplier, and you signed as a director, unless it actually states that the person signing the agreement becomes personally liable for the LTD companies account if they default, than they cannot enforce a judgment against you.

 

Any claim issued would have to be against the company, if they nolonger exist.....they can whistle in the wind.

 

I think they are trying it on.

 

Have they actually instigated legal proceedings?

 

debbie

[fourby16]

Hi Debbie

 

Thanks for responding.

 

Yes it is a Limited company, I did sign as a Director and the wording under the Guarantee section is as follows:

 

"In consideration of your agreeing to supply goods to the applicant company on credit, we the undersigned being owner/director/directors of the applicant company jointly and severally guarantee payment of all the financial obligations.... etc etc"

 

I did leave the company as per companies house last year before the company ceased trading in the past few weeks and no they are just sending out letters headed "Personal Guarantees" which is rather odd as per above the word "personal" is not used?

 

Chris

[AndyOrch]

By chasing you, what have you actually received Fourby?

 

Regards

 

Andy

[fourby16]

Andy

 

I will upload the text this evening.

 

Thanks

 

Chris

[AndyOrch]

Excellent, if the company is Dissolved any creditors will have been served the DS01 and informed at the time of dissolving.The creditor should have registered any outstanding arrears with Companies House anyhow.

 

Look forward to your uploads later Fourby.

 

Regards

 

Andy

[fourby16]

Andy

 

The company is not currently dissolved as they first issued a CVA in January and apparently to avoid paying their advisors £5k to wind the company up they have to wait 60 or 90 days to have it done automatically without cost, which I believe will be either in June or July

 

Regards

 

Chris

[AndyOrch]

Ah ok gone into administration ok no problem look forward to your uploads later.

 

Andy

[fourby16]

Andy

 

The wording in the letter is as follows:

 

We write in relation to the above outstanding debt and charges in respect of which correspondence has been sent to you.

 

You have provided Keyline Builders Merchants Limited with a signed personal guarantee confirming that you will pay any sums not paid by your company. We have been instructed to pursue you under the personal guarantee that you have signed as your company has failed to pay. Unless payment is received within 7 days we shall issue a statutory demand for payment followed by bankruptcy proceedings if the demand is not complied with.

 

Regards

 

Chris

[debbbbsy]

"In consideration of your agreeing to supply goods to the applicant company on credit, we the undersigned being owner/director/directors of the applicant company jointly and severally guarantee payment of all the financial obligations.... etc etc"

 

I have to say that this has become common practice among many builders merchants, employees and directors are signing credit agreements which include a clause which makes them personally liable if the company fails to pay.

 

This looks to me as if they have you. You have signed a personal guarantee on behalf of all the directors.Your only chance is in the wording "we the undersigned being owner/director/directors " if you can provide proof that you resigned as a director before this debt occurred you may be able to challenge this. Prove that you longer worked at the company when this problem arose, otherwise your only option is to personally go after the other directors as it clearly states, you are all joint and severally liable. Any claim will be issued against all of the directors, perhaps the threat of this will make them pay up.

 

Good Luck

 

Debbie

[Ganymede]

Hi Debbie

 

Thanks for responding.

 

Yes it is a Limited company, I did sign as a Director and the wording under the Guarantee section is as follows:

 

"In consideration of your agreeing to supply goods to the applicant company on credit, we the undersigned being owner/director/directors of the applicant company jointly and severally guarantee payment of all the financial obligations.... etc etc"

 

I did leave the company as per companies house last year before the company ceased trading in the past few weeks and no they are just sending out letters headed "Personal Guarantees" which is rather odd as per above the word "personal" is not used?

 

Chris

 

 

Hi,

 

How many directors actually signed it? Was it just you?

 

Thanks

[fourby16]

It was just me

 

Chris

[AndyOrch]

Still no sign of that Stat Demand then fourby?

 

Regards

 

Andy

[fourby16]

No but I have responed with a detailed earnings and expenditure to agree some sort of payment plan or settlement figure

[AndyOrch]

No but I have responed with a detailed earnings and expenditure to agree some sort of payment plan or settlement figure

 

So you are accepting that you are liable?

 

Andy

[fourby16]

It would appear that I have no other choice?

 

Chris

[AndyOrch]

I personally would not make any offer or payment until a SD landed.

 

Andy

[fourby16]

Why? Sorry what would your approach be once the SD had landed?

 

Chris

[AndyOrch]

If the SD lands ( which I have reservations it ever will as SD,s should not be used as a debt collection tool when there is an obvious dispute on the debt) I would then set a side and form a defence on the basis that there are existing directors (parties) involved which are jointly liable and that the company continued to trade after your departure.

 

Regards

 

Andy

[fourby16]

Good point, I have asked them to send me statements of all transactions from the date I left to see if the debt occured after I left.

 

Chris

[Steve Heys]

It appears we have a very similar situation arising I would be grateful to hear how this matter was concluded or any tips in divesting yourself of this potential liability.

[fourby16]

Hi give a contact email address some we can take this off line

[honeybee13]

Hi give a contact email address some we can take this off line

 

Hello there.

 

Please don't ask for email details; these should not be given out online, for everyone's security.

 

Please keep all discussions on the thread.

 

HB

[Steve Heys]

I would be grateful to hear how things were concluded with TP as we are awaiting a claim against a personal guarantor for around £8k signed back in 2007 apparently. Once we receive a copy of the document signed i guess we will be in a better position to know what version of form from TP was signed and how that may affect the approach.