Paulger v Butland Industries Ltd - [1989] 3 NZLR 549

Contract — Formation — Guarantee — Director of company wrote to creditors of company seeking 90 days grace and personally guaranteeing payment — Creditor awaited 90 days and, when payment was not made by company, sued director on his personal guarantee — Whether letter to creditor amounted to an offer — Whether creditor had accepted offer and provided consideration by forbearing for 90 days to enforce debt — Whether director was liable.

Contract — Mistake — Guarantee — In letter to creditors director of company personally guaranteed the company's debts — Creditor in reliance on guarantee forbore to enforce payment against company — Director later claimed that he was not guaranteeing payment from his own funds — Whether there was a common mistake by the parties — Whether director's mistaken intention was a mistake in interpretation of the contract — Whether director was entitled to relief — Contractual Mistakes Act 1977, s 6.