Bibby Financial Services Ltd v Magson
Bibby Financial Services Ltd (Bibby) offered an invoice discounting facility to a company and, as security for amounts due to Bibby, two directors of the company were required to enter into personal guarantees and warranties in respect of sums due.
The company defaulted. Bibby sought to enforce the personal guarantees.
The directors argued that neither the personal guarantees were not binding. because they were executed as deeds and while all signatures had been witnessed and the documents had been handed over, the directors asserted the documents had not been delivered.
The directors’ personal guarantees, even though signed and witnessed, were not in a final form: Manuscript amendments had been made with the intention that clean versions of the documents would be prepared incorporating the amendments, which would then be circulated and signed again.
At trial the directors’ argument won and Bibby could not enforce the documents as they had not been delivered as deeds.