Daily Archives: October 1, 2019

Improperly Executed Documents are Creditors Biggest Impediment

Improperly Executed Documents are the Biggest Impediment to Holding Someone Responsible for a Debt.

Occasionally commercial companies will place a debt with me to sue a company debtor and its individual guarantor where the personal guarantee is not properly executed.

The most common way that a personal guarantee is not properly executed (other than no signature), is when the personal guarantor puts a corporate title next to their name. For example, personal guarantors will sign a personal guarantee on the line for the signature for the individual as, for example, “Tommy Signature, President.” While the document that Tommy Signature signed might say that it is a personal guarantee all over the document and in fact make clear that it is a personal guarantee, in the vast experience of Cellai Law Offices, P.C. in the Court system, Judges typically view the inclusion of the word “President” to mean that the person did not intend to personally guarantee the debt.

While one can debate the issue and argue it in Court (and it is always worth arguing because there are some cases that support your position), most Judges look at the inclusion of a corporate title as an intent on the part of the personal guarantor not to be a personal guarantee.

Companies having their account debtors execute a personal guarantee should be very diligent about having an account debtor sign the personal guarantee in their individual capacity without a title.

No Written Contract? No problem. Usually.

No written contract but you still claim a debt is due? I am frequently asked about whether someone can sue for money owed even if they do not have a written contract.

My response is typically, yes, there is no impediment to suing for a breach of contract when there is no written contract provided the circumstances show an intent to contract. In fact, in a very large percentage of the cases that Cellai Law Offices, P.C. pursues for individuals, there is no written contract outlining all or sometimes any of the terms and conditions of the parties agreement. Sometimes, there is as little as a cancelled check with the word “loan” written on it.

As long as the parties have an agreement to enter into a contract (which can even be verbal) and there has been some conduct in furtherance of executing or conduct which furthers the contract in such a manner that the intent would be to enter into a contract, usually this is sufficient to form a contract for which you can bring a claim for breach of contract.

It is always worth inquiring about whether you have an enforceable contract.