Contracts
Friedman v. Fishkin, 722 N.W.2d 856 (Ga. App. 2019)
Study notes for Friedman v. Fishkin: professor notes, cold call prep, exam angles, and memory aids.
An individual providing a personal guarantee can be held personally liable for a breach of contract made on behalf of a corporation.
In Friedman v. Fishkin, the central issue revolves around the personal liability of corporate officers when they provide a personal guarantee for a corporate obligation. This case highlights the importance of personal guarantees and their implications in contract law. Professors often emphasize the necessity for entrepreneurs and corporate representatives to understand the vulnerabilities they expose themselves to when signing guarantees, as it can lead to personal asset exposure if the corporate entity defaults on the contract. Furthermore, the court’s ruling serves as a reminder of the principle of separate legal personality, which shields shareholders from personal liability—but this protection can be pierced through explicit guarantees.
Guarantee Equals Liability
| Case | Distinction |
|---|---|
| Pepsi-Cola Bottling Co. of New York v. A & D Intern. Inc. | In that case, the court found no personal guarantee was given, thus the corporate officer was not held personally liable. |
| Sullivan v. Gurtman | The court in Sullivan focused on the absence of a personal guarantee, emphasizing that personal liability cannot be imposed without it. |
Imposing personal liability encourages corporate officers to be diligent in their dealings and reinforces accountability in corporate finance.
Such liability may deter individuals from serving as corporate officers due to the personal risks involved, potentially hindering business development.
This case may appear on exams in the form of a hypothetical that explores the consequences of personal guarantees in corporate contracts and tests students' understanding of personal liability under contract law.