QUESTION
Is a personal guaranty signed after loan funded enforceable? How?
Asked on Aug 20th, 2015 on Litigation - Nebraska
More details to this question:
According to business law, a contract without consideration is void. In this case, the loan was funded when guaranty was signed. The lender's consideration is pre-existing or post.
6 ANSWERS
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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It sounds to me that the consideration for the guaranty was the granting of the loan. Consideration to a third person can be adequate to sustain enforcement
Answered on Aug 21st, 2015 at 5:03 AM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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The personal guarantee is enforceable.
Answered on Aug 21st, 2015 at 12:13 AM
Why did you sign anything if the loan had already been made? If the lender said it would not make the loan unless you guaranteed it, then there was consideration [making the loan] and it is binding. You are leaving out important information.
Answered on Aug 20th, 2015 at 4:51 PM
Yes, you are correcting stating a legal principle. However, we have a common law system that looks at all of the facts and circumstances. In practice, if the guaranty is signed a few minutes after the loan, it is viewed as part of the same transaction. In most situations like this, the contract to loan the money was contingent on the guaranty being provided and the guaranty is valid.
Answered on Aug 20th, 2015 at 3:48 PM
Thomas Edward Gates
Sorry, you guaranteed the loan by signing. The consideration was given to the party you signed for.
Answered on Aug 20th, 2015 at 3:11 PM
A personal guarantee is enforceable as soon as the contract is signed and the other party completes its obligations. The consideration is in the contract itself and is between the lender and the loan recipient. The personal guarantee is merely a promise by a third party to step into the shoes of the recipient, if for any reason the recipient fails to keep his side of the agreement (i.e.: make payments as required by the contract).
Answered on Aug 20th, 2015 at 3:06 PM