Judicial principles and studies
Dispute Involving a Company's Authorized Signatory and Corporate Guaranty in a Lease
A brief summary explaining the limits on enforcing an alleged guaranty in a lease against persons who did not sign as guarantors, and the limits of an agent's authority to sue in additional capacities.
Updated: 10 September 2026
Prepared and reviewed by: Ashraf Al-Khawaja
Subject
The plaintiff based the claim on the premise that one defendant is a partner and authorized signatory of the company under Article (39) of the lease, and the other is an authorized signatory and a personal guarantor under the same clause. The lease lacks their signatures in respect of the guaranty description.
Summary
- A guaranty contract requires offer and acceptance under Article 950 of the Civil Code, together with the evidentiary requirements in Articles 10 and 11 of the Evidence Law. Because they did not sign as guarantors, the contract text lacks probative effect against them by virtue of the doctrine of contract relativity in Article 206 of the Civil Code. - If the plaintiff's agent was authorized only to sue a defendant in his personal capacity, including those persons in the claim as partners and authorized signatories is procedurally improper; adding such capacities demands a new mandate due to the different legal consequences attached to each capacity.
Practical significance
- The lease clause cannot be relied upon as binding evidence against individuals who did not sign the guaranty under the statutory requirements. - Counsel and litigants must verify the agent's authorization scope before alleging additional capacities, and obtain a separate power of attorney if they intend to sue in those capacities. Note: This is an educational summary only; it is not a court text nor legal advice.
Sources and references
Verify the official text and latest amendments before relying on this material professionally.