Commercial analysis: The court considered whether the term of a personal guarantee for the debts of a company, provided by its director were enforceable in circumstances where the directorship had been terminated as a consequence of the company’s liquidation. Written by Graeme Kirk, barrister, at Lamb Chambers.

The case law behind guarantees is both long-standing and complex. It is imperative to have a good understanding of the principles developed by the case law when drafting and negotiating guarantees. This Practice Note sets out certain key cases and associated relevant content in relation to guarantees. The cases are divided by topic area and include: • cases relating to the characteristics of guarantees • cases relating to the formalities required to create a guarantee • cases relating to undue influence when taking a guarantee from an individual • cases relating to guarantor rights • cases relating to guarantor protections and varying the underlying transaction • cases relating to the rights and obligations of co-guarantors, and • cases relating to the discharge or release of a guarantee Key cases relating to the characteristics of guarantees Names of Parties Judgment Date Case Summary Relevant content Moschi v Lep Air [1972] 2 All ER 393 26 April 1972 This is the key case setting out the secondary nature of guarantees. The liability of a guarantor is a secondary

It is common for the parties to a facility agreement to want to amend its terms, often a number of times, during the life of the facilities. They may, for example, wish to extend the repayment date or increase amounts available to allow the borrower to fund another project or purchase. The lender may use an increase to the facilities to make other changes to the documentation such as an increase to the interest rate or additional undertakings. Such changes may be documented by an amendment letter, an amendment and restatement agreement or sometimes by the issuance of a new facility letter or agreement aimed at replacing the previous one. For information on how to amend a facility agreement, see Practice Note: Amending a facility agreement. Where the lender is to have the benefit of guarantees or third party security (see Practice Note: Third party security) (which is effectively a guarantee backed by security and so this Practice Note applies to third-party security as well as guarantees), it will want to ensure that it

A guarantor is a party that promises to a creditor or landlord that it will be responsible for another party’s obligations if that party fails to perform, typically in relation to payment of a debt or rent. In commercial and banking practice, the guarantor gives a guarantee (and often an indemnity) to support a borrower’s or tenant’s obligations, enhancing the creditor’s security and creditworthiness assessment.“Guarantor” is a descriptive term used across contract, banking, property and company law, rather than a concept with a single codified definition, though guarantees and suretyship are recognised and regulated by case law and, in some contexts, statute in England and Wales, Scotland, Northern Ireland and Ireland.Key legal features usually include: secondary liability (triggered on the principal’s default), writing and signature requirements for enforceability, and common exclusions or limitations on the guarantor’s maximum liability and duration. In corporate groups, guarantors frequently secure group borrowing or lease obligations.Usage of the term “guarantor” is broadly consistent across the UK and Ireland, though Scots law often uses the related concept of “cautioner”, and local rules on formation, interpretation, defences and enforcement of guarantees and indemnities can differ.

Lenders may require that the aggregate EBITDA and/or assets (gross or net) and turnover of the subsidiaries guaranteeing the facilities will represent a certain percentage of the total EBITDA and/or assets (gross or net) and turnover of the group (eg 80%). This is referred to as guarantor coverage.

Dear Sirs This letter confirms the advice that [I OR we] gave to [name of Guarantor] (the Guarantor) at a meeting on [date] in respect of the proposal that the Guarantor acts as guarantor for [name of tenant] [(company number [number])] (the Tenant) in respect of the obligations contained in a

Guarantees are a contractual arrangement where one party (the guarantor) agrees to answer for the liability of another party (the principal) to another party (the guaranteed party). The common law has developed over time to provide considerable protection for guarantors. The main rationale behind the protections is that a guarantor should have certainty about the amount, type and terms of the obligations it is guaranteeing and to protect the rights that the guarantor acquires as a result of being a guarantor. For more information on the rights of guarantors, see Practice Note: Guarantor rights and how to defer them in guarantee documentation—no competition clauses. Guarantor protections could prejudice a lender's position and it is common practice for lenders to seek to exclude these rights in guarantee documentation. This Practice Note summarises: • the key protections that apply to guarantors, and • common provisions that are used to exclude guarantor protections in guarantee documentation and whether such provisions are effective In most typical finance transactions: • the

Guarantees are a contractual arrangement where one party (the guarantor) agrees to answer for the liability of another party (the principal) to another party (the guaranteed party). Guarantors have various rights usually conferred in equity against the principal, the guaranteed party and any co-guarantors. Such rights can prejudice a lender's position and it is common practice for lenders to seek to defer these rights in guarantee documentation. This Practice Note summarises the key rights of guarantors that arise as a matter of law and how they are dealt with in guarantee documentation. In most typical finance transactions: • the guaranteed party will be the lender or the security agent, and • the principal will be: ◦ the borrower, or ◦ another company in the borrower's group—for example in a group borrowing structure or a cross-guarantee structure where each guarantor guarantees the obligations of the borrower and each other guarantor For information on guarantees in general, see Practice Note: Guarantees. This Practice

A person with parental responsibility for their child may appoint another individual to be the child's guardian in the event of their death. A guardianship appointment will only take effect on the death of the person with parental responsibility if at that time there is no other person with parental responsibility for the child.

A guardian ad litem is a person appointed by a court to represent and safeguard the interests of a child or an adult who lacks capacity in specific legal proceedings. The role is case‑specific and focuses on what outcome is in that person’s best interests, rather than on advancing the wishes of any party to the litigation. In England and Wales, the function is most commonly carried out by a children’s guardian or litigation friend, with detailed provision in the Family Procedure Rules and Civil Procedure Rules. In Northern Ireland and Ireland, “guardian ad litem” remains a commonly used term in child care proceedings, governed principally by child protection legislation and court rules. In Scotland, similar functions are performed by curators ad litem and safeguarder appointments in children’s hearings and court actions. Across all four jurisdictions, a guardian ad litem (or equivalent) may: investigate the circumstances; instruct a solicitor; obtain expert evidence; participate in hearings; and make recommendations to the court on welfare and best interests. Appointment, powers and reporting duties are defined by statute, court rules and case law in the relevant forum.

A guardian of the person is an individual with legal authority and responsibility to make decisions about a child’s or vulnerable adult’s personal welfare, including residence, education, medical treatment and day‑to‑day care, but not necessarily their property or finances. Across the UK and Ireland, the concept is more descriptive than technical, and different statutes use varied terminology. In England and Wales, “guardian” under the Children Act 1989 and related legislation usually refers to a person with parental responsibility appointed by the court or by a parent’s will, primarily in respect of a child’s upbringing. In Scotland, similar functions are exercised by a “guardian” or “welfare guardian” appointed under the Children (Scotland) Act 1995 or Adults with Incapacity (Scotland) Act 2000. Northern Ireland and Ireland use comparable concepts under their children and capacity legislation. The term is typically used in family law, mental capacity law and safeguarding to distinguish personal welfare powers from “guardian of the estate”, “property and financial affairs deputy” or similar financial roles. It is significant in disputes over residence, medical consent, schooling and care planning, and in cross‑border jurisdictional issues.

Law360, London: A London judge ruled on 23 September 2025 that actor Noel Clarke should pay half of the more than £6m legal costs of The Guardian newspaper's publisher for its defence against his libel claim over stories about allegations of sexual misconduct.