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Ultra-Poly Corporation v. Goz

A-0898-03T2 (N.J. Super. App. Div. 2004) (Unpublished)

GUARANTIES—Where a guaranty unambiguously says that it covers all future debts, it will be enforced even if the guaranty was given many years earlier.

A buyer and reseller of plastic raw materials did business with a plastic bag manufacturer. The plastic bag manufacturer delivered scrap materials to the first company where the scrap was reprocessed into pellets to be used again by the plastic bag manufacturer. The plastic bag manufacturer also bought additives and then began purchasing large quantities of plastic resin. When the purchase levels increased substantially in 1986, the president of the bag manufacturer gave a personal guaranty to the plastic supplier for “the prompt payment ... of all accounts payable ... now or hereafter owing and of any renewals, extensions or changes in the form thereof, together with interest ... and the reasonable cost of collection, including attorneys’ fees.” Two years later, a resin shortage greatly reduced the amount of business being done between the companies. Thirteen years after the guaranty was given, the plastic bag company and a sister company filed for bankruptcy. Some time thereafter, the plastic resin supplier, relying on the personal guaranty that it had received about fifteen years earlier, sued the bankrupt company’s former president on a book account. The president contended that the guaranty was intended “to apply to the newly commenced purchases of resin.” The Court did not find the guaranty to be so limited. It held that “[t]he guarantee was absolute, unconditional, and unambiguous. It was not limited by time or circumstance and was never voided, terminated, or cancelled.” Further, “extrinsic evidence, intended to alter or vary the guarantee’s clear terms,” was held admissible.

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