The New Jersey Supreme Court issued a unanimous opinion December 2, 2025, addressing a critical question in commercial law: whether a single signature on a contract can simultaneously bind both a corporation and its representative personally as guarantor.
In *Extech Building Materials, Inc. v. E&N Construction, Inc.*, the court considered a dispute that began when building materials supplier Extech presented construction company E&N with a two-page "CREDIT APPLICATION AND AGREEMENT" to govern sales and deliveries. Two E&N representatives signed the document, including defendant Joaquim G. Ferreira, who identified himself as the company president.
The agreement contained language stating that signers "DO PERSONALLY GUARANTEE UNCONDITIONALLY, AT ALL TIMES, ... THE PAYMENT OF INDEBTEDNESS ... OF THE WITHIN NAME[D] FIRM." However, the document included pre-printed words "No Title" under each signature line, creating ambiguity about whether the representatives signed in their corporate capacity, individually, or both.
The legal dispute arose when E&N failed to pay for building materials supplied under the agreement. Extech filed suit against both the company and Ferreira personally, seeking to hold him liable under the personal guarantee provision. This case highlights the importance of clear contractual language in commercial agreements, particularly when corporate representatives may face personal liability.
At the trial court level, the judge ruled in favor of Ferreira, finding that the agreement did not clearly establish the signers' responsibility as personal guarantors for E&N's debt. The court granted summary judgment, effectively dismissing Extech's claims against Ferreira personally. This initial ruling suggested that ambiguous contract language should be interpreted against personal liability.
However, the Appellate Division reversed the trial court's decision, determining that genuine issues of fact regarding the parties' intentions precluded summary judgment. The appeals court found that the ambiguous language in the credit agreement created factual questions that required resolution at trial rather than through summary judgment. This reversal indicated that courts should examine all circumstances surrounding contract formation when determining personal guarantee obligations.
The case reached the New Jersey Supreme Court after the court granted certification to review the lower courts' conflicting interpretations. Justice Fasciale wrote for a unanimous court, addressing the fundamental question of how corporate representatives can manifest intent to be personally bound by company obligations.
The Supreme Court established that "a valid personal guaranty of a company's indebtedness requires the signer to unambiguously manifest their intent to be personally bound." This standard emphasizes the importance of clear contractual language and unambiguous expressions of intent when creating personal liability for corporate debt.
The court acknowledged that "there are multiple ways a corporate representative can unambiguously manifest an intent to personally guarantee an underlying agreement." This recognition provides flexibility for commercial parties while maintaining the requirement for clear intent. However, in applying this standard to the facts of the case, the court found that Ferreira did not unambiguously manifest intent to personally guarantee the underlying agreement.
The decision has significant implications for commercial lending and supplier relationships. Building materials suppliers, contractors, and other businesses that extend credit to corporations often require personal guarantees from company officers to secure payment. This ruling clarifies that such guarantees must contain unambiguous language establishing personal liability.
For corporate representatives, the decision underscores the importance of carefully reviewing contractual language before signing agreements that may create personal liability. The case demonstrates that ambiguous signature provisions can lead to costly litigation, even when courts ultimately find no personal liability.
The unanimous nature of the decision suggests broad judicial agreement on the principles governing personal guarantees in commercial contexts. The court's emphasis on unambiguous manifestation of intent provides guidance for drafting future agreements while protecting corporate representatives from inadvertent personal liability.
Legal practitioners representing both suppliers and corporate borrowers should review existing credit agreements and guarantee provisions in light of this decision. Clear, unambiguous language specifying when corporate representatives accept personal liability will help prevent future disputes and litigation costs.
The case also highlights the construction industry's complex financing arrangements, where suppliers often extend credit to contractors who may have limited assets or credit history. Personal guarantees from company officers provide additional security for suppliers while creating potential exposure for corporate representatives.
Moving forward, the decision establishes clear precedent for New Jersey courts evaluating personal guarantee claims. The requirement for unambiguous manifestation of intent to be personally bound will likely influence how commercial contracts are drafted and interpreted throughout the state's business community.