12.04.2025Clarity Over Convenience: New Jersey Supreme Court Provides Lessons for Companies Seeking Personal GuaranteesOftentimes when dealing with a small business, especially a new one with limited credit history, it is wise to obtain a personal guarantee from the company’s principal. In its unanimous decision this week in Extech Building Materials, Inc. v. E&N Construction, Inc., No. A-28-24 (Dec. 2, 2025), the Supreme Court of New Jersey answered whether a single signature in an agreement binding a company as the principal debtor can simultaneously bind the signer in their personal capacity as a guarantor. In Extech, the answer was “no” – the single signature did not show the principal’s unambiguous intent to be bound as a guarantor. The Court’s decision, however, offered guidance to businesses going forward.
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