The parties said: ‘Mrs Ford: Where would money come from if M [the principal debtor] had to repay andpound;1 million? Colin Searle [the second defendant, M’s chairman]: From wherever in the group the money was at the relevant time. I’ll make sure it is there. I am good for andpound;1 million.’ The judge had held that this was a collateral warranty under section 4 because Mr Searle’s promise ‘only required him to ensure that M would have the necessary funds to enable it to repay the first instalment. It was not a promise that M would pay nor that Mr Searle would himself pay Autocar.’
Held: The words were merely a statement of comfort, but in any event, even assuming that the words had contractual force, they also regarded such a promise as falling within section 4. An undertaking to make sure that a company would have the money to meet a contractual obligation was a promise to answer for the debt of another within section 4 of the Statute of Frauds, assuming that the undertaking was an enforceable contractual warranty.
Judges:
Aldous and Henry LJJ, Staughton LJ dissenting
Citations:
Unreported, 20 June 1996
Statutes:
Jurisdiction:
England and Wales
Cited by:
Cited – Actionstrength Limited v International Glass Engineering, In Gl En SPA, Saint-Gobain Glass UK Limited CA 10-Oct-2001
The claimant sought payment for works undertaken. They had been given a promise that in return for not withdrawing their workforce from the site, the second defendants would redirect payments due to the first defendant to the claimant. When it came . .
Cited – Associated British Ports v Ferryways Nv and Another Comc 13-Jun-2008
The parties had contracted for the provision of berths for ferry traffic through Ipswich. Various performance promises were given. . .
Cited – Associated British Ports v Ferryways Nv and Another CA 18-Mar-2009
The court considered whether a document was a guarantee requiring the formality of the 1677 Act, or an indemnity.
Held: The appeal failed. The letter agreement was properly a contract of guarantee which foundered on the subsequent variation. . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 05 June 2022; Ref: scu.180429