Legal Question in Business Law in Massachusetts

Re: Personal guarantee

There is a legal maxim that says one should read carefully before signing, and it will be assumed that a person reads a contract before signing and agrees to be bound by the terms of the contract.

Having said that, and just by way of general considerations and not legal advice:

a.) a person does not have to have ownership in an entity or a blood relationship with a person in order for a guarantee to be valid and binding. There are plenty of situations where the guarantor derives a benefit (e.g. employment) from guaranteeing the entity's obligations.

While owners are sometimes required to provide personal guarantees, that may not always be the case.

b.) the facts and circumstances around execution of documents are important - if there are particular circumstances which suggest trickery or deceit, it is possible to challenge execution of a document. However, "small print" is not necessarily trickery, and we have all heard the adage, "always read the fine print."

Depending upon how much is at stake, it may still make sense to scrape up some money to speak with an attorney, because it may save money in the long run. The attorney may be familiar with different strategies that would work well in your situation. Contact your local bar association or look up the Mass Bar Lawyer Referral number in your telephone book - in some cases, a "low fee" panel attorney may be available, depending upon the situation.

Good luck!