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Legal News

Appealing guarantees (Jones v City Electrical Factors Ltd)

Published on: 10 April 2025

Table of contents

  • What are the practical implications of this case?
  • Definition of ‘liquidated debt’
  • Construction of the key terms
  • A matter for trial
  • What was the background?
  • What did the court decide?
  • Case details

Article summary

Restructuring & Insolvency analysis: The High Court dismissed an appeal against a County Court judgment which found a guarantor personally liable for debts of approximately £190,000. In reaching this position, the court provides an updated position on the extent a ‘conditional payment obligation’ can constitute a ‘liquidated sum’, the extent such a debt applies to section 267 of the Insolvency Act 1986 (IA 1986), and how the courts should approach interpreting the terms of commercial contracts more broadly. This judgment, and its accompanying analysis, is highly relevant to directors, liquidators and legal practitioners concerning the construction of guarantees and the successful enforcement of personal guarantees. Written by Stephen Alexander and Benjamin Meggitt-Smith from Mourant Ozannes (Jersey) LLP.

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