In Extech Building Materials, Inc. v. E&N Construction, Inc. (A-28-24) (089720) (Decided December 2, 2025), the Supreme Court of New Jersey held that a valid personal guaranty of a company’s indebtedness requires the signer to unambiguously manifest their intent to be personally bound. While there are multiple ways a corporate representative can unambiguously manifest an intent to personally guarantee an underlying agreement, the Court found that in this case the business owner’s single signature did not unambiguously manifest an intent to personally guarantee the underlying corporate agreement.
Facts of Extech Building Materials, Inc. v. E&N Construction, Inc.
To govern its sale and delivery of building materials to defendant E&N Construction, Inc. (E&N), plaintiff Extech Building Materials, Inc. (Extech) presented E&N with a two-page document entitled “CREDIT APPLICATION AND AGREEMENT.” Two E&N representatives signed, including defendant Joaquim G. Ferreira, the purported president of E&N.
The paragraph above the signature lines stated that the signers “DO PERSONALLY GUARANTEE UNCONDITIONALLY, AT ALL TIMES, . . . THE PAYMENT OF INDEBTEDNESS… OF THE WITHINNAME[D] FIRM.” Under each signature line, the pre-printed words “No Title” appeared. Accordingly, neither representative specified whether they signed the Credit Application as an E&N representative, individually, or both.
Extech supplied building materials pursuant to the parties’ agreement, but E&N failed to remit payment. Extech filed suit against defendants. The trial judge found that the agreement did not “make[] it clear that [the signers are] responsible as guarantors for the debt of . . . [E&N].” The judge granted summary judgment in favor of Ferreira. Extech appealed. The Appellate Division reversed, determining that genuine issues of fact regarding the intentions of the parties precluded summary judgment.
NJ Supreme Court’s Decision in Extech Building Materials, Inc. v. E&N Construction, Inc.
The New Jersey Supreme Court unanimously reversed. “We conclude that defendant Joaquim G. Ferreira did not unambiguously manifest an intent to personally guarantee the underlying corporate agreement,” Justice Fasciale wrote on behalf of the Court. “We therefore reverse the Appellate Division’s judgment and reinstate summary judgment in Ferriera’s favor.”
In reaching its decision, the New Jersey Supreme Court emphasized that a guaranty is fundamentally separate from the underlying contract, even if the two are written on the same paper or instrument or are contemporaneously executed. Even more important, “an unambiguous manifestation of intent is required because a guaranty is a separate legal obligation that binds an individual who would otherwise be outside the scope of the underlying contract,” Justice Fasciale explained.
The New Jersey Supreme Court went on to reject Ferreira’s argument that his single signature can’t simultaneously bind both E&N, as principal, and himself, as guarantor, explaining that New Jersey law has not imposed a bright-line two-signature requirement. The Court also declined to impose such a requirement, holding instead that a valid personal guaranty of a company’s indebtedness requires the signer to unambiguously manifest their intent to be personally bound.
As Justice Fasciale explained, there are multiple ways a corporate representative can unambiguously manifest an intent to personally guarantee an underlying agreement. The representative may (1) execute a separate personal guaranty agreement; (2) sign the underlying agreement once as a corporate representative and again individually; or (3) sign the underlying agreement a single time, provided that the agreement explicitly states their single signature binds both the company and the representative individually.
The New Jersey Supreme Court provided further guidance, noting that “the signer’s intent that is dispositive, not the signature’s technical form; technical form is instructive only insofar as it allows courts to discern the requisite intent.”
