Many times a lender or creditor will enter into a contract with a corporation or business entity and request that the signer or owner of the business personally guaranty all amounts due. There is a very specific legal way this should be done for the guaranty to be enforceable. When weighing whether a signatory intended…
Legal Articles
Guarantees: Interpretation, Breach
Personal guarantees or guarantees by another business are commonly required by lenders to provide additional safeguards for a loan. In litigation, the same rules that apply to contract interpretation apply to guaranty interpretation. Royal Banks of Mo v. Fridkin, 819 S.W.2d 359, 361 (Mo. 1991). Specifically, the language of the guaranty is to be understood in…
Personal Guaranty: General & Special, Breach, Interpretation
A guaranty — a species of contract — is a collateral agreement for another’s undertaking and is an independent contract that imposes responsibilities different from those imposed in the agreement to which it is collateral. Specifically, a guaranty is a contract where a guarantor becomes secondarily liable for the obligation of a debtor in the event the…