A year on from our previous update on trade suppliers, and the state of play remains very mixed.
While the vast majority of trade suppliers have made efforts, since 2008, to reduce ambiguity when it comes to the inclusion of personal guarantees (PGs) within application forms for business trade credit accounts, others appear to be slacking in such efforts. Although PGs can be obtained by way of a simple written or electronic signature by the director, this signature must be obtained in a clearly personal capacity and succeed in defining the individual as a party with a separate obligation to bear liability in the event of limited company defaults. We have seen larger building trade, and some, but by no means all, smaller scale and independent supplier adopt improved processes in this regard.
However, many trade supplier creditors, such as ScrewFix (frequently trading as ‘Trade UK’), UK Plumbing Supplies (frequently trading as ‘Heating Plumbing Supplies’, ‘HPS Merchant’ or ‘Plumbase’), TG Lynes and THX Tool Hire continue to exhibit many of the pitfalls characteristic of older application forms, and creating further stumbling blocks by for example, not identifying their own corporate status in the agreement, and/ or relying on unproven digital signatures.
Most of these suppliers continue to pursue the alleged personal guarantors with the same fervour regardless of their likely enforceability, and largely relying on the overall shift in the market which has seen improved enforceability on many building trade PGs, but by no means all.
If you are being pursued under an alleged PG forming part of a trade account application form and need help, please feel free to contact us HERE
