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510 Ryerson Road Corp. v., Inc.

A-5186-01T3 (N.J. Super. App. Div. 2003) (Unpublished)

GUARANTIES; LEASES—With adequate consideration, a parent company’s guaranty is enforceable even if its execution was not contemporaneous with that of the guaranteed lease.

A landlord obtained a judgment for unpaid rent from a tenant and its corporate parent and guarantor. The guarantor claimed that it should not have been held liable because “its guaranty was executed after the lease became effective, and therefore it [was] void for lack of consideration… .” The Court looked through the evidence and was reasonably satisfied by its review of the correspondence that the Guarantor’s defense that “the parties entered into the lease and the guaranty at different times [failed] as a matter of fact.” Further, the Court stated: “Even if we were to assume non-contemporaneous execution of the lease and the guaranty, [the parent company’s] argument would still fail since adequate consideration for the execution of the guaranty [was] evident. ... [T]he guaranty by a parent of an agreement by a subsidiary, as confirmed in a corporate resolution, inures to the benefit of the guarantor and provides sufficient consideration for the enforcement of the guaranty.” The business of the guarantor benefitted from the premises leased to its subsidiary and “[s]uch consideration is sufficient in the circumstances.”

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