Property Guarantees - Gordon Ramsay and his f%*#ing father in law!
A legal titbit from the world of celebrity this month, incorporating something of a cautionary tale in relation to giving personal guarantees for liabilities pursuant to a Lease.
Gordon Ramsay has been in court challenging the enforceability of a personal guarantee he had given for liabilities arising pursuant to the terms of a lease entered into by his company, Gordon Ramsay Holdings International Limited, in 2008. The Lease was for a term of 25 years at an initial annual rent of £640,000. The venture was unsuccessful and the Landlord sought to enforce the guarantee.
Gordon Ramsay was in court to challenge the enforceability of his personal guarantee, primarily on the basis that it was his father in law who had made the commercial decision to provide the guarantee, without his immediate knowledge. Furthermore the actual document (along with the Agreement for Lease and Lease) had been signed using a “Signature Machine” meaning that the document was signed without the signatory being physically present and, therefore, without authority.
The Court found that the Personal Guarantee was valid and enforceable by the Landlord on the basis the following facts:
- Although there had subsequently been a serious falling out, at the time of the Lease Gordon Ramsay had clearly given his father in law full authority to conduct his business and personal affairs, including capacity to make all requisite commercial decisions to further those interests. The personal guarantee fell under this remit;
- The market for the Property was competitive and the Landlord, therefore, had strong commercial grounds for requesting the guarantee and, correspondingly, it was reasonable for Gordon’s father in law to consider the commercial option of a personal guarantee;
- Gordon was aware of the Signature Machine and of the fact that it was used to sign legal documentation on his behalf in his absence and without his specific consent for each occasion of use.
A general point to draw from this rather particular set of circumstances (we don’t, after all ,expect that everyone has a Signature Machine)… keep an eye on who is authorised to make commercial decisions in your absence and always check what you are signing!
Posted on 03/12/2015 by Ortolan
