The bank brought a claim against the respondent based on a guarantee signed by him wherein he irrevocably and unconditionally guaranteed to pay any amount owing by the close corporation (the debtor) as if he was the principal debtor.
The respondent disputed the sum claimed by the bank in the certificate of balance alleging that amounts paid by the debtor had been omitted. However, such allegations were not substantiated with any documentary proof. Furthermore, the respondent alleged that he understood that he had signed a suretyship and not a guarantee.
The court found that the respondent’s misunderstanding that he had signed a suretyship and not a guarantee has no effect. The agreement was clearly a guarantee because: the agreement was headed guarantee; it referred to the respondent as the guarantor; it specifically mentioned that the guarantor would be guaranteeing the obligations of the debtor and the guarantee clearly stipulated that amounts claimed under the guarantee would be due and payable notwithstanding the guarantor or the debtor disputing any amounts claimed under the guarantee.
It remains the duty of the parties to a contract to understand the nature and effect of any agreement to which they are a party. Misunderstanding their obligations will not excuse their liability.
Full judgment can be accessed here: Investec Bank Limited v McGarry (15183/2024P) [2025] ZAKZPHC 82 (12 September 2025)