The High Court has ruled that a company director who signed a guarantee over a 35-year lease when he thought that all he was doing was witnessing the signature of a fellow director has no obligation under the guarantee.
Joshua Yardley had signed the last page of the document, at the request of another director, without having read its contents. He claimed not to have had any idea that he was ostensibly personally guaranteeing a yearly rental payment of £32,500. When the company failed, the landlords sought payment under the guarantee.
The landlords argued that Mr Yardley should be bound by the lease agreement, but the Court ruled otherwise. In its view, My Yardley had no obligation under the purported guarantee. The landlords were aware that the company was in difficulties yet had taken no steps to satisfy themselves that he had acknowledged that he had guaranteed performance of the lease.
Before signing any document, you should be clear as to what you are signing, why you are signing it and the possible consequences of so doing. When company documents are executed, it is important to have a clear record showing that all those who signed are fully cognisant of the commitments they are making.
We can advise you on all contractual matters.