Asked by Katherine Tortorella on Jun 12, 2024
Verified
Robert cosigns a note for his friend Amelia,which she has given to Credit Union to secure a loan.Suppose the note was originally for $5,000 and payable in 12 months with interest at 10 percent a year.Credit Union and Amelia later agree that Amelia will have 24 months to repay the note but that the interest will be 13 percent per year.Robert is not aware of this change of terms.In the event of Amelia defaulting on the loan,will Robert have to repay the debt?
A) Robert will have to pay the debt because he is the surety.
B) Robert will not have to pay the debt because he has not received any compensation from Amelia for being a surety.
C) Robert will have to pay the debt because he is the guarantor.
D) Robert will not have to pay the debt because he has not accepted the changed terms of the loan.
Guarantor
A person or entity that agrees to be responsible for another's debt or obligations if the original party fails to meet their commitments.
Surety
A person or entity that takes responsibility for another's performance of an obligation, such as repaying a loan, or for the accuracy of a statement.
Interest
The charge for borrowing money, typically a percentage of the amount lent.
- Learn about the duties and roles of sureties, guarantors, and cosureties in the field of contract law.
- Recognize the rights and obligations of parties in transactions involving security interests.
- Discern between the juridical properties and outcomes linked to sureties and guarantors.
Verified Answer
Learning Objectives
- Learn about the duties and roles of sureties, guarantors, and cosureties in the field of contract law.
- Recognize the rights and obligations of parties in transactions involving security interests.
- Discern between the juridical properties and outcomes linked to sureties and guarantors.
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