An oral conversation cannot give rise to an enforceable guarantee where the creditor is unaware of the existence of the principal debtor company, as the tripartite relationship essential to a guarantee is absent. The doctrine of ostensible authority cannot be invoked to bind one director to a personal guarantee given by a fellow director unless the director sought to be bound has personally done or said something creating the representation of authority. A purported agent's own statements cannot create ostensible authority.
The full text is available to signed-in members, including the 3 later cases that cite this judgment.