Insights & Articles

Providing a guarantee for someone else’s financial commitments can expose you to serious legal and financial risks. Before agreeing, ensure you understand the potential consequences - especially if you won’t directly benefit or lack full visibility and control over the obligation.

When entering relationships with new suppliers, it’s essential to carefully review the terms of trade, especially if they include a General Security Agreement (GSA). While a GSA can offer credit benefits, it also carries significant risks, potentially leading to receivership if payment issues arise. Understanding these terms is crucial to protecting your business.

On 30 October 2020 the Supreme Court delivered a landmark judgment in the context of contracts of guarantee in the case of Brougham v Regan [2020] NZSC 118. A summary of the key facts of the matter and important points in the Court's decision follow.