Author – Nicholas Boyce
Creditors are often faced with disputes by guarantors over the validity and enforceability of a guarantee following a failure by the principal to pay a debt.
Poorly drafted and ambiguous personal guarantees can give rise to guarantors being wrongfully released from liabilities, or alternatively documents being signed which are unenforceable and ultimately worthless.
The recent decision by the Supreme Court of New South Wales in the matter of Aquawest Pty Ltd v Twynham  NSWSC 652 is yet another reminder of the court’s reluctance to enforce a personal guarantee where the drafting contains ambiguities.
This article will cover:
- The decision
- General requirements of a guarantee
- Top tips for obtaining and enforcing personal guarantees