Unlimited Guarantee

[Never-In-Doubt]

Re: Unlimited Guarantee

I successfully wriggled out of a Barclays business loan agreement which related to my (then) husband's company because I had not been given independent legal advice on the consequences of any default. The bank's lawyers conceded that even though everything had been signed and witnessed properly it was conceivable that I hadn't understood what I was doing. Cheeky sods, but I was happy with the outcome There is case law on this very point

so they called you a thick bird, did they?

[PlanB]

Re: Unlimited Guarantee

so they called you a thick bird, did they?

For which I was very grateful

[PlanB]

Re: Unlimited Guarantee

My serious point was that Barclays accepted that an unlimited guarantee was sufficiently onerous that anyone entering into such an agreement should be given the opportunity to take independant legal advice whether male or female So signing in your office under pressure from a bank employee is not good.

[PlanB]

Re: Unlimited Guarantee

Greymatter can start with Barclays Bank vs O'Brien (1994) AC 180 and then
The Royal Bank of Scotland vs Etridge (No 2) (2001) UKHL 44; (2002) AC 773 where the issues of 'duress' and 'undue influence' came into play

Obviously as a thick bird I would have absolutely no idea what Lord Scarman was talking about

But I would say that although those cases may have been gender specific I can see no reason why a similar principle shouldn't apply to both sexes if/when a bank puts you under pressure to sign an important legal document

[greymatter]

Re: Unlimited Guarantee

Wow,thanks PlanB.
I got me wig and lippy at the ready,just in case.
GM

[PlanB]

Re: Unlimited Guarantee

The problem I have here also is that it could have been witnessed at work by a member of staff.I seriously cannot remember.However I still have contact with the person and will contact them to see if they can recall signing.A long shot but its worth trying.

GM. I wouldn't be too worried even if it had been witnessed by a member of your staff since all they would have been doing is witnessing that they saw you sign the document, but not that they had read and fully understood the contents and believed it to be suitable for your business needs. They just saw you sign a piece of paper full stop (i.e. it wasn't a forged signature). I get numerous documents witnessed by the lady in my local dry cleaners who has no idea what's in the contract since English isn't even her first language. The bank's representative could hardly be seen as to have given you independant financial advice on the product either since it was to his benefit.

I feel very strongly about banks' in-house financial/legal advice and hope that people with consolidated loans can argue a defence of under 'duress or undue influence' since it often is the bank employee who benefits from the deal by getting a bonus point which tranlates into commission. I think Madfish may have been in a similar situation.

[PlanB]

Re: Unlimited Guarantee

Hi CC
At the time 1998 I was under a lot of pressure business wise and changing the Bank did not occur to me.I did query the unlimited bit with the Bank manager who came to my office with the docs.He told me that'not to worry as the Bank would never impose this condition' he was coming across as doing me a favour with the loan as the company had only been trading for a year or so and was not yet generating sufficient funds to stand on its own. . . I was under pressure(the Bank wanted this surety as I would not be given the loan without it

It might also be useful to know a bit more about the financial health of both you and your company at the time you were persuaded to take out this loan. Did the business already have an agreed overdraft limit which you were in danger of exceeding to meet the day-to-day running costs? Or was this loan to provide business expansion? Was your personal banking also with Barclays and was that in any danger of going over the agreed limit? I still can't understand why you were forced to sign an unlimited guarantee when the loan was limited to £10k Surely if the bank didn't want to lend you any more than £10k they simply wouldn't have advanced you any more funds and/or bounced your cheques.

[greymatter]

Re: Unlimited Guarantee

Both my own finances and that of the Company were fairly dire.We did have an overdraft albeit small in business terms and yes I banked with Barcs at the time.The loan was to keep the Company going as I had launched a new product.I was also o/d at the time.If I recall ,I was told that the Bank could not lend the Company anymore than this amount,this was the limit he could go to.(As far as I can remember).

[greymatter]

Re: Unlimited Guarantee

I have really been trawling thro my very old files and came across a few letters from BC .In Jan 2001 they agreed to an o/d facility of £1500.This was to be reviewed in Feb 2001.They then went on to say that the o/d is secured by the unlimited Guarantee by me.
However the letter goes on to say that the limit will be cancelled on the 12th Feb 2001.
You could therefore take this as the Unlimited part of the Unlimited guarantee will be cancelled.Because the next correspondence that I have : May 2003 -Nov2003 ,the last one being March 2004 ,drops the Unlimited and refers to the account simply as Guarantee Liability.
Is this me clutching at bloody straws again or is there something of value here?
GM

[garlok]

Re: Unlimited Guarantee

The problem with Barclays and their business accounts is that they lump ALL of your business borrowings together into the umbrella of your personal guarantees of whatever type if you are a director of a small limited company.

So you personnally have a total indebtedness to the bank on the company's behalf. So your OD, your loans and any Business Barclaycard indebtedness will be in their eyes under that umbrella.

regards
Garlok

[garlok]

Re: Unlimited Guarantee

Hi FP,

They cannot charge for anything the business has not agreed by way of services. That "Sage Essentials" thing is a real con. Mrs G runs Sage anyway for the accounts and we told them to go whistle. Remember a limited company is a separate entity in law, i.e. another independant person and directors sign up "on behalf of" technically.

I would start by writing a letter of complaint over those charges enclosing an invoice for the total amount you fell is owing, semi itemised, plus at least the statutory 8% interest. I usually use the current standard overdraft charge rate at X% over the base rate when issuing this sort of thing to the banks.

regards
Garlok

[CleverClogs (RIP)]

Re: Unlimited Guarantee

Charges were for a service I never requested (business essentials with Sage or something like that!)

How was the software delivered to you?

Might regulation 24 of the Distance Selling Regulations 2000 (link) apply?

[CleverClogs (RIP)]

Re: Unlimited Guarantee

I think they *may* have sent a letter saying they were going to sign me up (but I never saw it, I'm not that organised!) and if I didn't want it I should tell them or something like that. They did mention something about Sage when the account was opened but we didn't say 'yes, we want it'. All in all, a BIG FAT CON!

In other words, it was inertia selling.

[PlanB]

Re: Unlimited Guarantee

Thanks Garlok
Understood.I really need time to think on this one.
GM

Time up !

GM I'm curious to know whether you've made any progress with your bank's unlimited guarantee problem

[greymatter]

Re: Unlimited Guarantee

Nothing as yet,but it is in my plan to start things moving at a later stage.I just need to be as sure as I can that I dont get nailed.So I am still investigating.The more info I gather the more sure I can be of success,
GM