Fairstate Ltd v General Enterprise & Management Ltd & Anor [2010] EWHC 3072 (QB) (29 November 2010)

Fairstate Ltd v General Enterprise & Management Ltd & Anor [2010] EWHC 3072 (QB) (29 November 2010)

The Guarantee Form is not an effective contract of guarantee as it fails to identify the creditor, principal debtor, and obligation to be secured, and is drafted for a different (banking) context. The defects are too fundamental to be cured by construction or rectification. The requirements of the Statute of Frauds 1677 s 4 are not satisfied. There is no enforceable guarantee by Mr Sarian in favour of Fairstate for GEML's liabilities under the Management Contract.

Citation
[2010] EWHC 3072 (QB)
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/guarantee) / Preliminary Issue Trial on Enforceability of Guarantee
Outcome
Claim against Mr Sarian as guarantor dismissed (preliminary issue decided in his favour)
Legal Topics
Guarantees, Statute of Frauds, Rectification, Misrepresentation, Agency
Contract Law Commercial Law Guarantees Statute of Frauds Rectification Misrepresentation Agency

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 11 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Fairstate Limited

Claimant

General Enterprise & Management Limited

First Defendant

Atef Sarian

Second Defendant

Procedural Posture

Civil (contract/guarantee) / Preliminary Issue Trial on Enforceability of Guarantee

Legal Issues

  1. 1 Whether the Guarantee Form signed by Mr Sarian is an effective and enforceable contract of guarantee under English law and the Statute of Frauds 1677 s 4
  2. 2 Whether the Guarantee Form can be construed or rectified to reflect the parties' intentions
  3. 3 Whether Mr Sarian is estopped from denying liability as guarantor

Ratio Decidendi

The Guarantee Form is not an effective contract of guarantee as it fails to identify the creditor, principal debtor, and obligation to be secured, and is drafted for a different (banking) context. The defects are too fundamental to be cured by construction or rectification. The requirements of the Statute of Frauds 1677 s 4 are not satisfied. There is no enforceable guarantee by Mr Sarian in favour of Fairstate for GEML's liabilities under the Management Contract.

Court Disposition

Claim against Mr Sarian as guarantor dismissed (preliminary issue decided in his favour)

Orders

  • Claimant's claim against Second Defendant as guarantor dismissed on the preliminary issue
  • No order as to rectification or estoppel