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Attorney Faisal Moghul Wrote a Peer-Reviewed Publication Regarding Deceptive Language in Consumer Contracts in the December 2014 Issue of The Practical Lawyer

New York, NY, December 16, 2014 --( The American Law Institute published attorney Faisal Moghul’s peer-reviewed publication, “Of Creditors, Guarantors, and Sureties: Whose Debt Is It Anyway,” in the December 2014 issue of The Practical Lawyer. Moghul is passionate about helping individual consumers look out for deceptive language in consumer contracts, which can potentially render them absolutely and unconditionally liable in the event of default.

Moghul said, “My hope is that after reading this article, you will be able to spot some of the deceptive language that most consumer contracts tend to have on the issue of personal liability of the signatory.”

He described in the publication how companies are utilizing vague clauses in their commercial contracts, which may force a signatory to the contract to become “absolutely and unconditionally liable for the entire loan amount in the event of default.”

He illustrated his point by describing a hypothetical legal dispute loosely based off of a case he helped litigate last year. The dispute involved business owner “Naïve Joe” and advertising company “Predatory Corp Inc.” Naïve Joe enlisted the help of Predatory Corp Inc. to generate revenue for his newly formed property management business, a Subchapter S Corporation.

Naïve Joe signed a contract with Predatory Corp without realizing he may have inadvertently assumed personal liability for his corporation’s debt in the event that the company failed to pay the significant advertising costs.

When Naïve Joe’s company unfortunately closed its doors, Predatory Corp filed a lawsuit against him to collect outstanding fees for advertising services plus interest, costs, and attorney fees. Naïve Joe had no idea he would become personally liable for the debts of his now closed company.

Moghul wrote, “In light of the experiences of Naïve Joe, it would behoove most business owners, entrepreneurs, investors or even first time home buyers to avoid signing any contract that renders them absolutely and unconditionally liable for the entire debt indefinitely.”

He concluded his article with several points to consider when negotiating personal guarantees, which include:

Capping the amount of liability to a certain dollar amount
Specifying a time limit within which the debt may be collected
Avoiding signing personal guarantees on behalf of an LLC/corporation

Faisal Moghul is admitted to practice in the District of Columbia and New York. His areas of practice include business law, and civil and commercial litigation. He is Managing Partner at the law firm of United Global Law Group PLLC located in Washington, DC and with branch offices in New York and Florida. A significant portion of his practice is dedicated to litigating business and commercial disputes among members and partners of closely held businesses, including Limited Liability Companies, Limited Partnerships and S Corporations.
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United Global Law Group
Faisal Moghul

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