FAIRSTATE LTD V GENERAL ENTERPRISE & MANAGEMENT LTD

[2010] EWHC 3072 (QB), Queen's Bench Division, Mr Richard Salter QC, 29 November 2010

Guarantee - Construction - Rectification - Estoppel by convention - Statute of Frauds 1677

The second defendant, Mr S, had signed a contract for the management of several flats on behalf of the first defendant and a connected guarantee. It was in dispute whether the guarantee had been signed by Mr S on behalf of the first defendant, as director, or on his own behalf. The claimant claimed against both defendants. Mr S's case was that the management contract and the guarantee form, whether considered separately or together, did not contain either an effective contract of guarantee, or a memorandum of any agreement of guarantee sufficient to satisfy the requirements of the Statute of Frauds 1677, section 4. The claimant disputed these contentions, saying that Mr S was in any event estopped by a recital in the management contract from denying that the guarantee form was an effective guarantee. The claimant alternatively claimed rectification of the guarantee form, in order to meet Mr S's points about its wording.