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Daewoo Electronics America, Inc. v. T.C.L. Industries (H.K.) Holdings Limited

2010 WL 3311839 (U.S. Dist. Ct. D. N.J. 2010) (Unpublished)

CONTRACTS; INTERPRETATION — Where a contract sets forth an event or condition that is to take place on a date measured from the date of the contract’s execution, and that contract is, itself, dated, unless the parties clearly indicate on the face of the contract that there is a different “date of execution,” a court will use the date on the contract as the date of its execution.

Two companies guaranteed a credit facility given to a related company by that related company’s supplier. The guaranty was time limited to “the 12 month period from the date of execution of this Guaranty.” The only date appearing was at the top of the document and read, December 4, 2003. There was no date associated with the signatures on the document. The supplier, however, argued that the signed Guaranty was not delivered to it until February 5, 2004. The supplier sold goods to the actual debtor and payment was made on account of all of its shipments made before December 4, 2004. Shipments made between December 23, 2004 and January 31, 2005 went unpaid. Based upon its contention that the guaranty had not been delivered to it until February 5, 2004, the supplier claimed that the guarantors were liable for the unpaid shipments. The Court, however, disagreed. It found “that by including only one date at the top of the guaranty, and leaving no space to insert a date on the signature page, the parties [] demonstrated their intent that the guaranty take effect on December 4, 2003.” According to the Court, “[h]ad the parties intended a date other than December 4, 2003 as the effective date, they could have omitted that date at the top of the guaranty and included a space on the signature page for insertion of an execution date.” As a result, the Court rejected the supplier’s evidence, submitted after the fact, that “the guaranty was not executed until February 5, 2004 because the guaranty was clear on its face ... .”

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