Mount Everest Mineral Water Limited

The dispute in *Mount Everest Mineral Water Limited v Iain Thompson* concerned the enforceability of a guarantee. The plaintiff, Mount Everest Mineral Water Limited, sought to recover moneys owed under a guarantee provided by the defendant, Iain Thompson, in favour of the plaintiff. The guarantee related to a loan facility extended by the plaintiff to a company.

The central legal issue before the court was whether the guarantee was valid and enforceable against the defendant. Specifically, the court had to determine if the defendant had provided valid consideration for the guarantee, and if so, whether that consideration was sufficient to support the promise to guarantee the company's debt.

The court found that the guarantee was supported by valid consideration. It reasoned that the plaintiff's forbearance from demanding immediate repayment of the existing debt owed by the company, and its agreement to continue to make further advances to the company, constituted sufficient consideration for the defendant's promise to guarantee the debt. This forbearance and continued financial support were seen as a benefit to the company and a detriment to the plaintiff, thereby establishing a legally recognised exchange for the guarantee. The court applied the established legal principles regarding the requirement for consideration in contract law, holding that a promise to perform an existing contractual obligation or to forbear from exercising a legal right can constitute good consideration.

The court ordered that the guarantee was valid and enforceable, and judgment was entered in favour of the plaintiff for the amount claimed.