Asked by Alaina Harry on Jun 24, 2024
Verified
Davis owes a $5 million debt to C Bank.He also owes $2 million to Samuel.However right now,Davis is having trouble paying either loan.C Bank is willing to finance Davis's debt,but only if Samuel co-signs.Samuel,who fears that he will get nothing on his $2 million loan if Davis does not get some help from the bank,is willing to do so.Thus,C Bank,Samuel,and Davis complete a three-party agreement in which the bank agrees to finance the $5 million debt,Davis agrees to pay it back at a certain rate over a certain term,and Samuel agrees to pay the debt "in the event that Davis first defaults." Is this agreement covered by the statute of frauds? Why or why not?
Statute of Frauds
A rule of law mandating that specific contract categories must be documented in written form to be legally binding.
Three-Party Agreement
A contract involving three distinct parties, each undertaking specific obligations or rights.
Co-Signs
refers to the act of signing a loan or agreement alongside another person, assuming joint responsibility for the obligation.
- Gain insight into the theory and practice of the statute of frauds concerning agreements.
- Distinguish and classify primary from collateral agreements.
Verified Answer
Learning Objectives
- Gain insight into the theory and practice of the statute of frauds concerning agreements.
- Distinguish and classify primary from collateral agreements.
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