Legal Question in Civil Litigation in Massachusetts
personal guaranty
closed a business that was incorperated in mass. one vendor was not paid and now they are suing me personally. they have a credit app. that i signed only my name, no title after, and above in small print it says i am personally guarantying payment
2 Answers from Attorneys
Re: personal guaranty
If the papers that you signed are in the form you describe, you agreed to personally guarantee business debts to that vendor (many vendors will not sell on credit to small corporations or LLCs unless the owners agree to be liable for any debts).
While it is likely this agreement is enforceable, the facts and circumstances surrounding the execution of the credit agreement may provide a basis for asserting a defense to this claim. I (or any other lawyer0 would need more information before coming to an opinion on this issue.
Re: personal guaranty
Mr. Wiest is correct. In fact, I would be more forceful and say that, absent clear fraud in the inducement/execution, you owe this debt personally. Those engaging in business are presumed to take care with the contracts they sign. If you knew enough to incorporate, you will probably be held to have known enough to refuse to sign agreements without reading them. "Small print" defenses are generally allowed only to consumers.
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