Hire a lawyer to read the lease before you sign it.
In Tennessee, the rule of law is that a fool with a pen acts at his own folly. Or, if you sign it, too bad. And, if it is a “guaranty” you are liable even though you did not personally get the money, the goods or the services.
Sometimes, even a fool is lucky. A “guaranty” must contain certain terms to be binding. For instance, the guaranty must set out the obligations or duties of the guarantor.
As lawyers, we love it when non-lawyers write their own contracts. And, as one recent case shows, non-lawyers usually do not save money. We love it when:
a. the landlord named in the lease does not exist
b. the lease names you as the lessee in the heading but the signature lines are for your company (and you sign as president)
c. you don't own the company when you sign the lease (and everyone knows it)
d. you sign the "Guarantor" line as "Larry N. Lunan, President"
You might win the lottery and be able to win and convice the court of appeals that there is no binding agreement because of the lack of a "meeting of the minds.”
The Moral of this Story is: You get what you paid for – in this case about $20,000 in legal fees and a losing case. Save some pain – Hire a lawyer.
McNaughton v. Lunan, M2008-00806-COA-R3-CV (Tenn. Ct. App. May 14, 2010)
No comments:
Post a Comment