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


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Hi,

I'm looking at threads 411036, 281753 and 374505, which are closed. 

I have the same situation. 

 

I signed the attached document in October 2016 and resigned as a director (change of personal circumstances) in November 2016.

 

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

Of course, 3 years after I had left I knew nothing about the running of the account. 

To this date I had never been contacted personally by Trade UK, despite me being named on this document as the "Account Contact".

 

I had no idea I had signed a personal guarantee. 

I didn't provide any personal details other than my name and d.o.b,; and the for states that they "may search Experian" for verifying my identity. 

It doesn't make clear that this is a personal guarantee.

 

I don't see the outcome of any of the threads above - although one contributor says they made a settlement (but I believe their contract was worded slightly differently).

 

Can anyone advise on this?

Many thanks indeed in anticipation.

 

ScrewfixAccountApplication.jpg

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Just very briefly – you're quite right doesn't appear to be a personal guarantee – but then it does refer to terms and conditions which you agree is signatory that you have read and understood. Do those terms and conditions refer to a personal guarantee? Although I have to say I think that if you signed a personal guarantee then it should be much clearer.

The second thing which occurs to me is that at paragraph f. You have signed as a director. I'm not familiar with company law usual practice, but it suggests to me that they are obtaining a guarantee from a director and if that person is no longer a director – or if the company has been dissolved so that there are no directors any more, then I'm not sure that there is anybody that they can proceed against.

However, we would need more information about what exactly you have signed.

What is the value of the sum they are chasing?

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Thanks very much for your quick reply. 

 

The amount of their claim is nearly £3,500. 

The company is still running, I believe, but it is clearly struggling and I've had nothing to do with it for 4 years now.

 

Really sorry, but I don't have easy access to their Ts and Cs as they were at the time. 

They have probably changed since 2016. 

I could ask for them if it would make a difference.

 

Whilst I haven't accepted responsibility, I have negotiated with them (by begging!) so far to just over half of this amount... and I said I'd give a response by Monday. 

 

Whilst this is small fry in some terms, I am about to be made redundant so every penny counts; and morally I just find it so wrong.  They did 3 years of profitable trading with the business after I left; they have never contacted me in these 4 years until now; and I have never seen the goods they are asking me to pay for.

 

My concern is that I signed "For and on behalf of..." the company and I absolutely fulfilled my obligations in that regard for the one month since whilst I was a director.

 

Much appreciate your time.

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The amount of their claim is nearly £3,500

 

 

Claim ?   Have you received a court claim or just demands ?

 

Andy

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Thanks, Andy.

 

I have received a letter from their solicitor, who has been "instructed to seek recovery of the outstanding balance...".  Apologies if my legal terminology isn't good!  I guess this is a "demand" not a "claim".

 

I phoned to discuss and bleated about my not having appreciated that this was a personal guarantee.  After a couple of iterations we've reached a final offer for settlement from them, as described above.

 

Phil.

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Thanks ...so does this demand refer to a Letter before Claim or before Action or mention Pre Action Protocol ?

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Oooh! :)

 

Is says they "..are instructed to issue court proceedings with a view to obtaining a CCJ...".  However, it says their client "...would prefer to reach an agreement..." rather than do this, and they asked that I phone their office to discuss.

 

I took this to be an implication that they weren't 100% confident, though of course I didn't want to ignore this.  I phoned and asked if the solicitor thought they would accept £1000 - whilst not accepting responsibility, I wanted to test the waters and buy time, really, whilst I considered whether and how I might pay it.

 

Thanks again!

 

Phil

 

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Once again, you should understand that your question may be outside our experience and so you should treat what we say as "informed/intelligent guess".

However, it seems to me that if you have signed something on behalf of the company then I think that you are representing the company and not representing yourself. Also you signed as a director and once again that indicates to me that the agreement they have is with a company officer and not with you personally.

On that basis, in the absence of any company law to the contrary, I would say that you have not signed a personal guarantee. The piece of paper that you signed – because that's all it seems to be – doesn't have any other information. But of course, there may be some company law about this of which we are not aware.
Have you searched the Internet to see what a personal guarantee looks like? I suggest you do it. Find one or two or maybe even three examples and understand what are the common principles amongst them and the extent of the agreement. You might even like to link to 1 or 2 of them here on this thread.

 

However I'm not worried because you tell us that you have contacted the solicitors directly – and I believe that you did it on the phone, so you have no real record of the conversation – because presumably you didn't record it. (You should read our customer services guide).

But on the phone, I understand that you have reached some kind of agreement – although I don't know the extent of that agreement in terms of its binding nature. It is possible to reach agreements with people which are binding despite the fact that there is no writing.
It might be helpful to know more about the conversation. How was it left? Are you waiting some kind of written confirmation or something else that you have to sign?

Finally, I'm a bit concerned that even if you have only reached an agreement in principle which has yet to be finalised, you have left the solicitors with an expectation that they have agreed a certain settlement with you – and if you are now looking to renege on that agreement in principle, they aren't going to be very happy.

I don't say this to be critical of you. If you haven't signed a personal guarantee then I think that there is absolutely no reason why you should pay anything and I think there is no reason why you shouldn't renege on any agreement in principle – which at the end of the day has been achieved by a solicitor who presumably knows their way around this kind of thing and has lots of experience, against you who seems to have very little experience of this kind of thing and is clearly panicked.
This seems to me to be a very uneven match.

So the questions are –
was this really a personal guarantee? As far as I can see it wasn't.
Did your phone call result in a binding agreement? We don't know enough about it - but there is a strong chance that it did not if it was predicated on an agreement with you as a director and not on a personal guarantee.
If it was not a binding agreement but you then go back to the solicitors and say that you change your mind, they may start to get very nasty and so you should be very sure of your ground.





 

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Please note in the case of a LTD/PLC/LLP/LP Buisness this form should be signed by a Director.

 

You wasnt a Director was you of the company ?

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Thank you so much for your time.  You're spot on - I am very panicked, scared and stressed over it, especially under my current circumstances.

 

I initially replied as a knee-jerk reaction by email, which I headed with "Without prejudice" to try and protect my ignorance.  I was very careful not to commit either way, though, so I'm sure I haven't entered into any contract of settlement . It has to date been very informal - almost friendly. 

 

The solicitor has emailed their responses, but each time he has, he has invited me to phone to discuss and talks very informally.  At one time he agreed it "seemed unfair" in the conversation, whilst not stating it was wrong!  I also felt, until the latest email, that he was suggesting that there was more room for movement on their part and I that I should telephone to discuss it.

 

I also explained when I phoned that I wasn't sure of my legal position, which is why I was phoning, so that I couldn't be held to account for anything I put in writing.  I am sure he wouldn't be surprised if I said I didn't want to settle as I intended to refuse.

 

My own view is very much on the lines of what you're suggesting:

  • I absolutely don't believe this is a personal guarantee.  It is worded as "for and on behalf of" the company, and it asked for my position in the company - not my home address.  They said they would use Experian to verify my identity only, not my credit-worthiness.  They didn't request any personal info other than d.o.b..  I don't think that any Ts and Cs could over-ride this, surely?
  • However, I do feel they have been very "reasonable" in nearly halving their settlement amount and I definitely don't want to jeopardise this unless I'm absolutely 100% certain that the law is on my side.
  • I am very concerned that as soon as I question my liability they will withdraw their offer and add further charges / actions.
  •  

I'm attaching a section from a similar trade agreement I signed which account, thankfully is ok.  It's so different!

 

Thanks again.

 

Phil

 

 

 

SamplePersonalGuarantee.jpg

 

Hi Andy,

Sorry, I missed your question whilst replying to BankFodder.

 

Yes, I was a director, but I could see it wasn't going to generate the millions I'd been promised, so when I was offered another job at 4x the salary I resigned and left. 

 

This was only a month after I had signed the agreement with Trade UK, but it wasn't intended to happen as such.

Thanks

 

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  • Andyorch changed the title to Screwfix / Trade UK Personal Guarantee

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 

 

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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 .

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Thanks ever so much, Moss41.  That's really encouraging.

 

I am tempted to phone their solicitor and "innocently" state that I have been advised the above Elpis case law, asking his opinion.  I imagine he will either refute out of hand or suggest I put it in writing for him to take to his client.  If he refutes I'm tempted to pay the £1800.

 

Referring to the other topics I listed in my first email, Trade UK seem to play hard-ball.

 

What do you think?  Should I be more forceful and risk (1) my own legal fees and (2) their original settlement + fees being imposed?

 

Cheers,

Edited by RS200Phil
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you should not ever be using the phone!!

should this case progress to the regulators or to court, you have no paper trail of what was ever said or threatened.

 

write by royal mail only getting free proof of posting from any PO counter.

 

have you actually received one of these and the reply pack?

 

 

 

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please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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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)

 

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Thanks very much both!  I take so long to reply I get another response in the meantime.  Between you all you have given me the confidence to go for it, scary as it is.

 

I think because of the morals of the case - insofar as they know the supply and default happened 3 years after I left; and they never contacted me (I suspect they tried and were told I had left) - I feel comfortable with this approach.

 

I'll get it sent over the weekend.

 

Compliments of the season to all.  So appreciate you kindly taking the time to share your knowledge and experience.

 

Phil

 

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Well keep us updated. And start recording your calls – read our customer services guide. It's essential in all your dealings with any company – not just this lot

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i know weve seen a few screwfix claims here but i dont think we've lost to date

 

can we just confirm WHAT you receive was NOT a letter of claim as per my example

and that the solicitors stated client is screwfix please on their letters and not some powerless debt buyer too..

 

 

 

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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Sorry, dx100, I didn't reply to your question as I wasn't quite sure how!

 

It doesn't explicitly state that it is a Letter of Claim, but it does seem to fulfil the requirements of such, in accordance with the link provided, so maybe this is what it is.

 

Either way, I was proposing to respond as follows, after an initial warm introduction:

 

The outcome of my legal advice is that I did not sign in a personal capacity, but as clearly stated on the form “for and on behalf of” and the business name is given as “xxxxx Ltd”.  This does not constitute a personal guarantee under s4 of the statute of frauds 1677, as referenced by the Elpis Maritime Co. Limited case.

 

I am attaching the relevant section of the Trade UK form, demonstrating that:

 

1.      The “Trade Account Card Agreement” is made explicitly in the name of the business;

2.      The form is explicitly “Signed for and on behalf of” the company and that company is named as xxxxLtd;

3.      The guarantee in section (f) of the conditions is to guarantee, as a director, the performance of the company.  Records demonstrate that whilst I was a director I fully complied with this guarantee.  The account was not at issue until 3 years after I ceased to be an employee or director of xxxLtd;

4.      The form states in section (e) that the Experian credit reference agency may be used to verify my identity. The implication of this I took at the time to mean it was absolutely NOT a personal reference of credit worthiness, and thus not a personal guarantee.

 

I am also attaching a copy from a section of a competitor’s credit application form.  This form is explicit and unambiguous in being a personal guarantee.  I would expect the same from Trade UK.

 

Now that I am confident of my legal status, I intend to defend my position.  I now consider the proposed action to be not only morally unjustifiable, but legally so.

 

The enclosures are the two images I attached earlier in this thread.

 

What do you think?

 

Thanks ever so much again.

 

Phil

 

SolicitorsLetter.pdf

 

I meant to add that my name is stated on the agreement as being the account contact. 

 

In the 4 yours since I left - indeed up to now - I have never received any communications from Trade UK. 

 

Surely they must have tried calling the "Account contact" and been told that I left years ago? 

 

Is that relevant?

 

Thanks

Edited by RS200Phil
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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 

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thread tidied PDF in your last post .

i would say as this is shoos and they are quite aware of the pre action protocol, that that is not a letter of claim.

it's a cleverly worded threat -o-gram.

 

can i just additionally check, they indicate they included a reply form

i post it earlier in our PAPLOC reply link 

but was there a reply form included like the one i've attached below

 

 

 

 

reply form pap.pdf

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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  • dx100uk changed the title to Screwfix,Trade UK/Shoosmiths chasing Business a/c but no? Personal Guarantee

urm...

not par chance in scotland are you?

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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