Edward agrees over the telephone to sell some shares in his company, Zephyr Limited, to Farouk. Edward is concerned about Farouk’s ability to pay, so Farouk asks his friend, George, to guarantee payment. George rings up Edward, and says: “It’s fine; if Farouk doesn’t pay you, I will – no problem.” Edward plans to use the money from the share-sale to go into supplying finance to consumers who wish to buy household goods. One of Edward’s acquaintances, Harry, knows of these plans and asks Edward to lend him £1,000 to buy a car. Edward lends Harry the money, and they document the agreement by an exchange of letters. Fired with enthusiasm for his new activity, Edward leases an office from another acquaintance, Irene, who promises that in return for an increased rent, she will help him decorate the office to make it attractive to customers. The term of the lease is for six years. Again, the transaction is documented by an exchange of letters. Advise Edward as to the formal validity of the contracts involved and any liability that might arise.