KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Guarantor leaves company and other guarantee issues /  final cs webinar today
October 31, 2023
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Guarantor leaves company and other guarantee issues
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Ken
          If the person who signs the contract for a commercial property has left the company, but they personally guaranteed it, who is responsible for the contract, the company or the person who signed it?
Megan
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Response
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          The Commercial Standard Form Agreements call for a guarantor.  A guarantor is requested because the subscriber is presumed to be a corporate entity [and that includes a LLC] and the guarantor is presumed to be a live person, usually the corporation’s shareholder or officer; sometimes the guarantor can be another corporate entity, such as a parent corporation.  While some guarantees can have limitations and specific terms, the guarantee in the Standard Form Agreements do not; the guarantee is unrestricted and guarantees performance, not just collection.  In other words, the guarantor is liable for the same performance as the subscriber.  A guarantor is therefore responsible for all payment obligations of the subscriber.
          As mentioned, guarantees can come with conditions and limitations [and again, the guarantee in the Standard Form Agreement come with no such limitations of conditions].  For example, when the guarantee is found in a lease to real property, a clause limiting the guarantor’s liability to rent only while the tenant remains in possession is called a Good Guy Clause.  You could have a Good Guy Clause in the commercial alarm contract, for instance, limiting the guarantee to the first 12 or so payments or some other future event].
          In the context of the alarm contract most guarantees will be unlimited and therefore the guarantee is not conditioned on the guarantor’s continued employment with the subscriber.  A guarantor remains liable on the guarantee whether still employed, whether still getting compensation, whether healthy and no matter the financial condition of the subscriber.  A guarantor cannot cancel or terminate the guarantee [unless the guarantee language permits it].  A guarantor can however sometimes avoid the guarantee by certain consequences as a matter of law, assuming certain facts can be established.  A guarantor will be relieved of the guarantee if the underlying contract being guaranteed is modified without the guarantor’s consent.  For example; the guaranteed contract is for three years.  One year into the contract the alarm company and the subscriber agree to extend the contract for another 7 years without getting the guarantor’s consent.  The guarantor’s guarantee would be void beyond the three years.   Another example might be where the subscriber falls into arrears and the alarm company doesn’t take steps to collect the arrears.  A guarantor could claim that the guarantor was prejudiced by the alarm company’s failure to enforce the contract [this claim is more tenuous than, for example, the alarm company and subscriber agreeing to increase the RMR substantially without the consent of the guarantor]. 
          There are lots of scenarios and legal counsel should be consulted; another good reason to join the Concierge Program right now.
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ALL WEBINARS WILL BE RECORDED AND ACCESSIBLE ON K&K WEBSITE
 https://www.kirschenbaumesq.com/page/alarm-webinars
Don't miss out on live Q&A and your chance to be heard
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central station webinars - FINAL WEBINAR TODAY
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          If you haven’t signed up for the webinars you’re making a mistake.  The live presentations offer you the opportunity to ask your questions and get answers.  You can join on any device including your office computer or your smart phone, so even if in the field or driving you can join and even participate.
          If you miss the live webinar, no worry.  It should be posted on the K&K Website for alarm webinars within a few days of the live presentation; go here to check: https://www.kirschenbaumesq.com/page/alarm-webinars
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Central Stations series: Why You Should Be Monitored By Our CS
Hear from the leading central stations and “Why you should be monitored by” that central station.  The topic of remote operator monitoring from outside the central station facility and the dynamics that issue presents is sure to come up. 
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FINAL CS WEBINAR:
October 31, 2023 noon ET, Rapid Response Monitoring Center
Registration Link: https://register.gotowebinar.com/register/2959829660260960857
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STANDARD FORM AGREEMENTS: To order up to date Standard Form Alarm /  Security / Fire and related Agreements click here: www.alarmcontracts.com
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CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com