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Orix Credit Alliance Co. v. Muholland

A-4067-97T2 (N.J. Super. App. Div. 1999) (Unpublished)

GUARANTIES—A forum selection clause in a guaranty is enforceable even if the guarantor does not read its terms.

An equipment leasing company obtained a default judgment in New York against its lessee’s guarantor. The lease, which included the guarantee, was printed on both sides of a single page. The signature boxes were on the front and the back. The lease contained numerous terms and conditions, including a New York forum selection clause which was set off in bold print. On the front of the document, above the signature line, appeared in large capital letters, “SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS WHICH ARE PART OF THE LEASE.” The guarantor claimed that it only received a copy of the front of the lease but did not deny signing the single page, two-sided original with the additional terms, including the forum selection clause. Here, where the transaction was not governed by the New Jersey Franchise Act and was not an insurance policy, the forum selection clause was held to be a viable contractual provision. Even though the guarantor claimed that it was unaware of the conditions on the back of the lease, especially its forum selection clause, the Court would not relieve the guarantor of the consequences just because the guarantor might not have read its terms.


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