Fairstate Ltd v General Enterprise & Management Ltd & Anor

Fairstate Ltd v General Enterprise & Management Ltd & Anor

The Guarantee Form was so fundamentally defective in failing to identify the creditor, principal debtor, and the obligation to be guaranteed that it could not be construed or rectified into an effective guarantee. It did not satisfy the requirements of the Statute of Frauds 1677 s 4, and no estoppel arose to prevent Mr Sarian from relying on these defects. Accordingly, Fairstate's claim against Mr Sarian failed.

Parties
Claimant: Fairstate Limited; First Defendant: General Enterprise & Management Limited; Second Defendant: Atef Sarian
Jurisdiction
England and Wales
Judgment Date
29 November 2010
Procedural Posture
Civil (contract/commercial) / Judgment on Preliminary Issue (liability of Second Defendant as Guarantor)
Outcome
Claim dismissed as against the Second Defendant (Atef Sarian) on the preliminary issue.
Legal Topics
Guarantee, Statute of Frauds, Rectification, Estoppel, Misrepresentation
Contract Law Commercial Law Guarantee Statute of Frauds Rectification Estoppel Misrepresentation

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Parties

Fairstate Limited

Claimant

General Enterprise & Management Limited

First Defendant

Atef Sarian

Second Defendant

Procedural Posture

Civil (contract/commercial) / Judgment on Preliminary Issue (liability of Second Defendant as Guarantor)

Legal Issues

  1. 1 Whether the Guarantee Form signed by Mr Sarian is an effective contract of guarantee enforceable by Fairstate against him for GEML's liabilities under the Management Contract
  2. 2 Whether the Guarantee Form satisfies the requirements of the Statute of Frauds 1677 s 4
  3. 3 Whether the Guarantee Form can be rectified to reflect the parties' intentions

Ratio Decidendi

The Guarantee Form was so fundamentally defective in failing to identify the creditor, principal debtor, and the obligation to be guaranteed that it could not be construed or rectified into an effective guarantee. It did not satisfy the requirements of the Statute of Frauds 1677 s 4, and no estoppel arose to prevent Mr Sarian from relying on these defects. Accordingly, Fairstate's claim against Mr Sarian failed.

Court Disposition

Claim dismissed as against the Second Defendant (Atef Sarian) on the preliminary issue.