Posted: Thursday, 5 March 2015 @ 15:28
So Gordon Ramsay got himself into a bit of a pickle and came off worst.
It was all about a Personal Guarantee on a lease of a restaurant and hotel held by his company Gordon Ramsay Holdings International Limited.
He challenged the personal guarantee on the basis that he did not personally sign it. His signature was put on the document by a signature writing machine used by his father-in-law. In fact there were 2 such machines at his company's premises. he claimed that his father-in-law did not have his knowledge or authority to use the machine for that purpose.
A personal guarantee is only binding if it was signed by the guarantor or someone authorised by him. An electronic signature is sufficient.
On the facts the judge found that Ramsay knew of the machines and had given his father-in-law authority to use them.
The judge also found that the agreement was in fact an indemnity and not a personal guarantee, so it did not in fact require a signature anyway. So the use of the machine was irrelevant. What was important was that the father-in-law had Ramsay's authority to bind him to an indemnity.
If it had been a personal guarantee then it is most likely that Ramsay would have lost anyway. It was not decided if the use of a signature machine was in fact an "electronic signature". It probably is. If it was not an indemnity the judge would have dealt with this, but made no finding.
So it was a painful outcome for Gordon.
The lessons to be learnt are, firstly be very careful to whom and in what circumstances you give authority to sign on your behalf, secondly record the authority in writing, and thirdly keep your authorities under regular review and withdraw them (in writing) at the earliest appropriate moment.
And finally, take urgent legal advice if you are on the wrong end of a demand under a personal guarantee, or indeed an indemnity.
Business and Litigation Solicitor
Tel: 0845 003 5639
Blog by Nigel Musgrove
Nigel has been providing dispute resolution advice as a solicitor for over 35 years. As well as advising SMEs and business owners on disputes he also offers a specialist licensing law service. View profile
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