Guarantors: guaranteeing they stay ‘on the hook’
A recent High Court case serves as a timely reminder to landlords that if there is a surety to the lease they must be consulted in relation to any proposed variations if they are to remain liable for the tenant’s obligations. Topland Portfolio No 1. Ltd v Smiths News Trading Ltd  EWHC 1445 (CH) upholds a simple rule established in the 19th century that where a guarantee has been given any subsequent amendments to the primary underlying contract will discharge the guarantor’s liability under the guarantee, unless: the guarantor has consented to the variation; or the variation is clearly insubstantial or incapable of adversely affecting the guarantor.
The tenant in this case was a company in the WH Smith’s group (although not WH Smith itself). It entered into the lease in question in 1981. The company now known as Smiths News Trading was a party to that lease as guarantor. In 1987, the tenant carried out an extension and alterations to the subject premises pursuant to a licence to alter agreed with the landlord. Smiths was not a party to that licence…
If you are registered and logged in to the site, click on the link below to read the rest of the Collyer Bristow briefing. If not, please register or sign in with your details below.
News from Collyer Bristow
News from The Lawyer
Briefings from Collyer Bristow
Chuka Umunna has announced that if elected the Labour Party will undertake major reforms of the current employment tribunal system.
The draft Equality Act 2010 (Equal Pay Audits) Regulations 2014 came into force on 1 October 2014.