Joyce's son, Al, borrowed money from Verity Finance. He lost his job last month and has not made the latest payment on the debt. When Verity's collections department telephones, Joyce answers the phone. She agrees to make the payments if Al does not because she is worried about his state of mind due to his job loss. If Verity, without Joyce's knowledge, extends the time Al has to make the payments but increases the interest rate by ½%, because he explains about his job loss, they could no longer enforce Joyce's promise, regardless of whether or not it was in writing and signed by her.

Question

Quizplus · Accepted Answer

Joyce's promise to pay Al's debt is considered a surety, which is contingent upon the original terms of the contract between Al and Verity Finance. If Verity unilaterally alters the terms of the agreement with Al (such as extending the payment period and increasing the interest rate), without Joyce's consent, her promise can be voided because the original contract she agreed to guarantee has been materially altered.

Joyce's Son, Al, Borrowed Money from Verity Finance