Screwfix,Trade UK/Shoosmiths chasing Business a/c but no? Personal Guarantee

[MOSS 41]

Hi- have a lot of experience in this currently , my first point is you signed on behalf of a company , - I shall dig out the relevant ‘elpin’ case law , which is why that is not a personal signature - 

 

and as such does not meet the s4 statute of frauds 1677 meaning it is not a guarantee 

 

that must be in writing and signed (in a personal capacity 

 

If I was in your shoes (although unless you have other evidence ) I would not be paying this , and I think the solicitor is trying it on 

 

give me 10 minutes and I’ll get the relevant case law - I do not recognise this as a personal guarantee , in my unqualified opinion 

 

 

Elpis Maritime Co . Limited v Marti Chartering co.inc (1992) 1.A.C.21 

 

The issue was whether a guarantor had signed as a charter party not in his personal capacity but ‘on behalf of’ a company had any bearing on the enforceability of the guarantee under s4 of the statute of frauds 1677.

 

House of Lords held that if a guarantor had signed solely in his capacity as an agent of the company , then he was not party to the charter party at all , and a prior oral agreement (I’m assuming there is no proof of a prior oral agreement) between the parties had not been subsumed in the relevant clause of the charter party, therefor no written or signed agreement of the guarantee under s4 .

[MOSS 41]

i agree with dx100uk,

 

i this still general contact, or have you received a letter before action or pre action protocol pack? 

if you have received a pack i would be responding to it in writing etc for a paper trail.-always respond in writing

 

£3500 small claims, so little cost to defend, and there are , apart from the most useful defence i gave you, others like the Etridge priciples etc- 

 

but for me its a cut and dry elpis case, and i feel unless they have any other evidence, i would simply write back, something along the lines of 

 

-ive sought legal advice

- this does not constitute a guarantee under 'Elpis' statute of frauds etc and explain why

-ask them under what legislation are they relying on that would make this a personal guarantee, as it does not meet the criteria under s4 f the statute of frauds?

 

at this point i would still be writing in a friendly way, politely pointing out its failings in claim and inviting them to explain or demonstrate why you are not correct in your understanding?

 

you must make all decisions that suit your circumstances, whether you want to negotiate , play hard ball etc 

everyone is different

 

and dont under estimate how aggressive they can get, dont get bullied, when their case is weak or unenforceable, they will go strong to beat you down , as its their only really successful way of getting any money out of you.

 

im finding alot of creditors using court claims, merely as a form of debt recovery strong arming, when they dont actually have much success of winning for various reasons.

 

courts are for genuine, enforecable claims-, which can be confirmed , discovered in the pre action stages, not for people to abuse court systems to make people pay, hoping a court letter will scare them (they dont actually intend on making it to court)

 

[MOSS 41]

I would imagine , that have run out of avenues to Chase other people and are now , Extending  demands to you ,  

 

If it was me , I would be standing my ground and sending the letter informing them , that there is no personal guarantee , and with out proper evidence of such (which has currently not been provided in there documents/unless there are others we haven’t seen  )  , to cease and desist collection activity 

 

but it’s All about what you are comfortable With , I wouldn’t say that letter is too demanding - they want contact and a payment plan, ccj talk mere threats right now , to scare you 

[MOSS 41]

I have to agree with dx100 - 

 

the info I gave you from one of my cases was from a barrister - who helped me - there is no personal guarantee where you sign on behalf of a company , and not in a personal capacity 

 

I gave up approaching solicitors for general information a long time ago - 

 

they are just picking on the easiest person to give in , if the company is still trading, even though in difficulty , they could pay or come to an arrangement to pay , how do you know , they are not paying or in an arrangement 

 

not only do they have to prove personal guarantee , they have to prove amount owing is genuine etc have you had a statement of account and copies of invoices to prove what the asked of you - 

 

as you said earlier 
 

In August 2019 the company defaulted on their account and in November 2020 the Trade UK solicitor chased me for the payment 

 

they tried the company for a year , then thought They would have a go at you - 

 

if they knew there was a valid personal guarantee , trust me , you would have been contacted September 2019 not one whole year later - they are trying it on 

 

I would bet money on a very well written response  with case law - would end further communications from them , they  know you are flustered and are playing on your fears