Does the lack of minutes or resolution change the validity of an executed facilities agreement?
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Does the lack of minutes or resolution change the validity of an executed facilities agreement?
I am a director of a company which is part of a group of 3 companies. Another company in the group took out a term loan and my company guaranteed the loan. I executed the facilities agreement containing the guarantee however now we seem to have no minutes or resolution of the board of my company approving the guarantee. Please advise me on the validity of the guarantee etc
Asked on June 7, 2016 under Business Law, Alaska
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
No, assuming (as I do) that as the director of the group, you have actual authority to have executed the guaranty and the facilities agreement more generally--and you certainly, in that position, would have "apparent authority" which outside 3rd parties could reasonably rely on--the lack of minutes or a corporate resolution has no effect whatsoever on the validity or enforceability of the agreements; they are completely enforceable and valid. Resolutions and minutes are not required for executing agreements under the law.
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