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I signed a franchise aggreement (unfortunately) and I would like to know if the :

 

personal guarantee`s that was included is legal, if it was not witnessed, at the time of signing, and their is no provision for a witnesses signature, is there a set format for this, and could it be deemed invalid and/or, not binding? when is a deed not a deed?

 

Your advice would be welcome.

 

Thanks!

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Hi Ford, yes thanks for that, I am not sure whether it could be termed a deed, as it was within a sixty page document,and was signed some years ago, without legal advice save as to costs.

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according to that link one essential requirement for a deed is the need to be signed and attested in the presence of at least one witness. so, if not then not executed as a deed?

Edited by Ford

IMO

:-):rant:

 

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Well! that being the case I may well have saved my bacon, but I have seen too many "false dawns" already with this aggreement which is fairly watertight!

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poss q then seems whether presented as a deed or not? if not, then could just be in contract? 'A guarantee is a contract and therefore must comply with the basic requirements of a contract including the need that there be “consideration” for the promise – an issue frequently overcome by executing the guarantee as a deed.' that link above. did you provide consideration?

another link if applicable

http://www.ffw.com/publications/all/articles/ff---enforce-your-guarantees.aspx

Edited by Ford

IMO

:-):rant:

 

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Hi Ford do you know anything about, or recognise the "Unfair terms in commercialcontracts act "?

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are you referring to the Unfair Contract Terms act? Unfair Terms in Consumer Contracts Regulations? which bit?

did you provide consideration?

Edited by Ford

IMO

:-):rant:

 

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Hi Ford, Did I provide consideration?? please excuse my ignorance, but could you elaborate please!

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hi, meant was there consideration, seeing as you asked about it being a deed #1. and re #2, #6 where they say that a deed is sometimes used to overcome the required 'consideration' element in a contract.

v. briefly 'consideration' is eg 'that actually given or accepted in return for the promise', as they say.

Edited by Ford

IMO

:-):rant:

 

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depends on the term guarantee or guarantor?

usually a guarantor is responsable in the contract if something goes wrong, and as such has no benefit from the contract and therefore it must be as a 'deed'. and may also need be under seal, but must be witnessed.

if just a guarentee and you are involved in the contract or a joint benefactor to the contract then it is just part of the contract.

anyway all this may have to be decided by a court.

You will need leagal advise on this.

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Hello,

 

As a guarantor, you are effectively saying you will pick up a debt if the party you are guarantor to fails to keep their part of a contract. In your case, were you guaranteeing that a limited company make payments under a contract in return for the franchise? If so, then it is most likely that a guarantee agreement must be a deed. The reason for this is that under a contract, both parties must get something. That's what that term "consideration" is about. For example, the limited company pays money to the franchiser and gets goods and services in return. However, as a guarantor, you won't get anything in return which could prevent a contract forming (unless as guarantor you get awarded the franchise maybe?). One of the key differences between a deed and a contract is that a deed doesn't require both parties to get something.

 

A deed is executed as such in the presence of a witness. If not, it could be invalid.

 

I had to fend of a grossly unfair personal guarantee that was pushed onto me under duress. In fact, your best defence against a PG is that they are quite hard to enforce. Legally speaking, that means expensive to enforce. So the general tactic would be to make those pursuing your PG believe you are skint and throw up as many objections as you can think of. It is entirely possible that once they work out you're not going to be a push-over, which means they have to face large legal costs and in fact you're skint anyway, that they will just throw away the PG.

 

Have you received a demand under the guarantee or are you just worried about what you signed?

 

FFP


My Background: I am not legally trained so the advice I offer is as a result of my experiences in business and being dragged through a bankruptcy process by a leading London law firm over a debt that turned out to be false. I won as a litigant in person :-)

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Can anybody help?

I attended County Court in January of this year,

to set aside a statutory demand relating to a franchise which I owned for a number of years,

 

it has taken 6 months for the judge to reach a decision,

the judgement was sent to me the other day in a six page document in which he decided that out of a petition for £54k that I would have to pay £30k within 28 days or face another petition for bankruptcy,

 

The judge stated that the legal costs could be substantial,

the reason for this being,

that the franchisor is trying to rack up the legal costs,

with "my financial ruin" his ultimate goal,

 

this is a well rehearsed plan with many franchisees being bankrupted over the years, with the same solicitor involved.

 

My question is:

is there a ceiling,

as to what can be charged in relation to what should have been a fairly straightforward application,

at which they introduced a Barrister at the hearing as well as a solicitor to oppose the set aside of the bankruptcy petition,

 

the judge did say in the judgement that a " detailed assessment" may have to be carried out,

but I am extremely worried by the fact that these people will try to maximise my debts,

with the view of making an example of me,

to other franchisees out there, and "not to mess with them" or they will face a similar fate.

 

My next question is: can these charges be appealed? and can they be paid over a period of time.

 

Thanks.

Edited by citizenB

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There is a fair bit of missnig information here, as you haven't said what the case is about or why it took six months, or what judgment was made. This is not a criticism, just bear in mind it will affect the advice you get. I may have misunderstood your post, but it sounds unlikely that the judge would accuse the other side of racking up legal costs and then go ahead and award them full costs anyway.

 

Unless the judge fixed the amount already, there is no cap. Generally speaking, at an assessment they will not get costs which are unreasonably incurred, unreasonable in amount or disproportionate; with any doubts resolved in your favour. Given the value of 30k, I think you may struggle to argue that it was unreasonable for them to involve a barrister.

 

Note that if the order says costs are awarded on an indemnity basis, then the position is a bit different. Please review CPR 44.3 http://www.justice.gov.uk/courts/procedure-rules/civil/rules/part-44-general-rules-about-costs.

 

You are supposed to try and agree costs with the other side by negotiating. They would normally initiate that process. If you cannot reach agreement there is a detailed assessment procedure which involves the other side providing a bill of costs, you serving points of dispute, and an assessment hearing to decide what you must pay. Unless you achieve a substantial reduction at the assessment hearing you would likely be ordered to pay the costs of that hearing.

 

There is no particular provision for costs to be paid over a period of time. Costs would be treated as any other debt here. You could try to negotiate monthly payments, otherwise would need to make them get a court order and then apply to court to set mothly payments on form N245. For now it is better to focus on minimising the headline amount and sort out monthly payments once the amount has been fixed.


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Hi Steampowered,

the case is about my bankruptcy,

for an alleged debt that that was imposed on me under extreme duress while being a franchisee,

 

I signed to accept a bill for £35k to allow me time to sell the business,

as I had run over the licence agreement time (10 years) and the franchisor had refused to renew it,

and had granted extensions of 1 or 2 months at a time to (Allegedly) allow me time to negotiate a sale of the business,

 

this was anot true

as he had no intention of allowing me to sell the business,

but demanded that accept a fine and legal costs equating to 35k

or that I would have to cease trading the same day,

 

so, unfortunately, I signed but the only reason that I signed was that I thought that I was going to be allowed to sell the business,

but what the franchisor did was to obstruct/deter any possible buyers,

and I was subsequently terminated and was hit with this bill.

 

John H.

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Hi, it was was a six page document within which The Judge awarded them 30k. out of a claim of 54k. to be paid within 28 days,

 

failing to pay this sum will result in them petitioning for my bankruptcy,

the problem I have is, that I do not know what they are going to try and screw me for legal costs,

and secondly whether they can go after the remainder of the claim.

Thanks.

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OK. Was this a statutory demand set aside hearing, bankruptcy petition hearing or county court hearing for a CCJ?

 

What does it say about costs? Please type out the exact words used?


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Hi Steampowered,

I placed an application to "set aside" a statutory demand! in respect of a bankruptcy petition.

 

The Judgement stated

 

" As to costs Whilst Mr.*****(me) must pay ****** (them) costs,

given the very substantial costs claimed,

 

I shall direct that those costs be subject of a detailed assessment,

rather than conducting a summary assessment.

 

Regards John.

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OK. So you should try and negotiate the costs down substantially.

 

It might be best to wait until they contact you, or you receive their bill of costs. When this has been done you will need to serve a points of dispute if you can't reach agreement about the costs, I can give you a template points of dispute if needed.

 

In the meantime do you have a plan for dealing with the 30k debt? It sounds like the judge upheld their SD in respect of that amount?

Edited by steampowered

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Hi Steampowered,

unfortunately,

the people that I am dealing with are quite ruthless,

and my financial demise is their ultimate goal,

 

the whole case was purely malicious,

and an abuse of process,

and not based purely on sensible commercial decisions,

 

I do not believe that they will be prepared to negotiate as I have tried to,

many times in the past,

they are looking to put me to the sword,

as a way of deterring others,

who may wish to stand up for their rights.

Regards John.

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advice required!

 

I recently had a judgement in the county court relating to an application that I made,

to set aside a bankruptcy petition,

and it stated that I had 28 days in which to pay,

otherwise the other party could apply to bankrupt me again,

 

my question is after the 28 days has lapsed

how quick will the bankruptcy follow?

and can I ask the court for more time to pay,

or a payment plan?

Thanks.

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Hi John

 

Do you mean to set a side a Statuary Demand ? Judgments are CCJs (County Court Judgment) which you can set a side .

 

Regards

 

Andy


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Hi Andy,

 

Yes! it was a Statutory demand.

 

Thanks John.

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