Asked by Ailis Galdo on Jun 23, 2024
Verified
Tina cosigns a promissory note at Globe Bank for $500 for her friend Tom.Tom defaults on the loan,and Globe Bank collects $500 from Tina.Tina then collects $500 from Tom.Tina could collect money from Tom because of her right of ________.
A) subrogation
B) reimbursement
C) contribution
D) attachment
Right of Reimbursement
The legal right to be compensated or repaid for costs, expenses, or losses that have been incurred on behalf of another party or as a result of certain conditions being met.
Promissory Note
A financial instrument or written promise in which one party agrees to pay a specified sum of money to another party under set conditions.
- Scrutinize the circumstances in which a contractual party may employ the rights of subrogation, reimbursement, contribution, and exoneration.
Verified Answer
CR
Chandan RupanaJun 29, 2024
Final Answer :
B
Explanation :
If the surety performs or pays the principal's obligation,she is entitled to recover her costs from the principal;this is known as the surety's right to reimbursement.
Learning Objectives
- Scrutinize the circumstances in which a contractual party may employ the rights of subrogation, reimbursement, contribution, and exoneration.
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