Which of the following is a collateral promise?
A)A mother tells a merchant to extend $1,000 worth of credit to her son and says, "If he doesn't pay, I will."
B)Andrew promises Donald that if Donald cannot pay his bills, Andrew will.
C)A father tells a merchant to deliver a computer to his daughter and says, "Send me the bill. I'll pay for it."
D)All of the above are collateral promises.

Question

Quizplus · Accepted Answer

A collateral promise involves a third party agreeing to pay the debt of another if that person fails to do so. In option A, the mother promises to pay if her son does not, which is a collateral promise.

Which of the Following Is a Collateral Promise