Legal Question in Business Law in California

3 word personal guarantee, enforceable?

I was the CEO of a company and while CEO I signed a contract addendum to restructure a relationship with a consultant. I agreed to a draft of the agreement. The consultant showned up while I was busy, put the addendum in front of me which I quickly signed without re-reading it. He had inserted a sentence into the latest draft which I did not catch as the pagination was the same. It included the wording ''payments are guaranteed by (company name) and myself personally''. Now a year later, I have left the company, it is no longer solvent, and the payments are about to come due and he is demanding that I pay him or he threatens to sue me. I have run several companies over the last 20 years, have contracted with countless consultants, and have never personally guaranteed payment to any of them. Is this insertion of a few words within the text, which I never would have agreed to, enforceable? What is my best defensive/offensive posture?


Asked on 7/15/08, 7:59 pm

2 Answers from Attorneys
Terry A. Nelson Nelson & Lawless

Re: 3 word personal guarantee, enforceable?

Posturing is a non-issue time waster. He either sues or he doesn't. If he sues, you'll obviously need counsel to defend you. The admissible documents and other evidence will determine who wins this argument. If you want to try to persuade him out of filing, then have your attorney write a strong demand letter laying out the defects in his 'case'. It may be worth a shot. Feel free to contact me if serious about getting the legal help you'll need.

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Answered on 7/17/08, 2:24 pm
OCEAN BEACH ASSOCIATES OCEAN BEACH ASSOCIATES

Re: 3 word personal guarantee, enforceable?

You may cross-complaint to have the contract reformed due to mistake, fraud in the inducement, etc. Contact me directly.

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Answered on 7/16/08, 1:03 pm


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