Guarantees, Estoppel and the Statute of Frauds

Extract

Actionstrength Ltd. v. International Glass Engineering In.Gl.En. SpA and others [2003] UKHL 17, [2003] 2 W.L.R. 1060 raised two issues of law: the nature of a guarantee caught by section 4 of the Statute of Frauds 1677, and the question whether one may be estopped from claiming that such a guarantee is unenforceable for want of formalities.

The first defendant (“Inglen) and the claimant (“Actionstrength) were contractor and sub-contractor, respectively, in the construction of a factory for the second defendant, Saint-Gobain Glass UK Ltd. (“St-Gobain”). In February 2000 Inglen owed Actionstrength 197,000, so that Actionstrength was contractually entitled to withdraw its labour. St-Gobain's representative promised (or so Actionstrength alleged) that if Actionstrength would continue to supply labour to Inglen, St-Gobain would do its best to ensure that Inglen paid Actionstrength and, if Inglen did not do so, that St-Gobain would itself pay Actionstrength, if necessary using monies due from St-Gobain to Inglen.