It is trite to say that all guarantees given by you as a business owner or as a parent for example, need to be very carefully considered.

We at Papallo Kouchoo have seen too many disasters where personal guarantees have been provided which have later resulted in action by banks (or worse, second or lower tier, very high interest charging financial institutions) coming after the guarantors personally in relation to the entirety of their assets.

This is a very difficult time for many guarantors, especially for those who have provided guarantees in relation to their children’s business say – businesses which sometimes fail leading to the effective loss of the parents’ one asset, their home.

There are other situations where we have acted for those who have provided their landlords (or others) with (unconditional) bank guarantees (BGs) with the BG being in imminent danger of being ‘called upon’ in unreasonable circumstances.

For example, where a contractor has completed the works in accordance with a given contract, the principal (say the homeowner or a developer) unreasonably refuses to release a Bank Guarantee for reasons known to them only. They may have a problem with alleged defects in the works, defects which they have failed to communicate earlier, or they may have disputes which have not been part of a payment claim, or which have not been accounted for in any variation or delay costs reckonings.

Circumstances such as this mean that the contractor may have to take action to protect the Bank Guarantee (or other security) especially if their business security and wellbeing in turn depends on that primary security as far as their sponsoring banks are concerned. Some future projects may depend on the Bank Guarantee being returned, and the banks may refuse liquidity if a Bank Guarantee remains unaccounted for or, worse, if it is called.

Papallo Kouchoo have acted effectively in a variety of such cases, and have proven results in ensuring that timely (and many a time, extremely urgent) action is taken to ensure that our client’s rights are upheld to the maximum extent of the law and that justice is truly done.

At Papallo Kouchoo Lawyers, we do our utmost to uphold your rights and to ensure that your contractual rights are safeguarded in a cost-effective way.

If you have any questions, please do not hesitate to contact us for an obligation free professional consultation.