Handshake loan from partner’s family member

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Handshake loan from partner’s family member

I have a question regarding a handshake loan for my business. I founded my company with one other partner and we received a loan to get started from his mother. We each signed a personal guarantee. Now, 1 year later, things are not working out as predicted with the partner and I am thinking about separating and just starting on my own. I have enough money to cover my percentage of equity in the company. My worry is that upon separation, bad blood could be there and the mother tries to go after the full loan amount from me and not her son. Basically, as a business and personal guarantor we signed for a loan of 100k. When I try to separate, I just want to hand her a 50k check and be done with it. Can she ignore her son’s loan obligation and try to come after me for the full 100k even though we are 50/50 partners?

Asked on December 18, 2016 under Business Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

It depends on the terms you agreed to in the personal guaranty, which is a contract. If you guaranteed the full $100k, then yes, she can seek the full $100k from you: when more than one person is liable or responsible for a sum of money, the law does not require the person to whom the money is owed to go after everyone--she is allowed to seek it all from one of the people, subject to the terms if the guaranty of other agreement. You however would have a viable "cross claim" against her son for contribution, since he is also obligated, and could bring him into a lawsuit (if she were to sue you) as a "third party defendant" via a "cross complaint" for his share.


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