Fact Pattern 28-1B
Chocolate! Chocolate! Corporation is a new company that needs to borrow money to meet its payroll.Dayna,president and owner of Chocolate! Chocolate!,asks Evermore Credit Union to loan the funds to Chocolate! Chocolate!
-Refer to Fact Pattern 28-1B.Generally,for a contract between Evermore and Dayna with respect to liability for Chocolate! Chocolate!'s loan to be enforceable,it must be in writing if Dayna is
A)a surety.
B)a lienor.
C)a garnishee.
D)a guarantor.

Question

Fact Pattern 28-1B 
Chocolate! Chocolate! Corporation is a new company that needs to borrow money to meet its payroll.Dayna,president and owner of Chocolate! Chocolate!,asks Evermore Credit Union to loan the funds to Chocolate! Chocolate!
-Refer to Fact Pattern 28-1B.Generally,for a contract between Evermore and Dayna with respect to liability for Chocolate! Chocolate!'s loan to be enforceable,it must be in writing if Dayna is
A)a surety.
B)a lienor.
C)a garnishee.
D)a guarantor.

Quizplus · Accepted Answer

A guarantor is a person or entity that agrees to be responsible for the debt of another. Generally, contracts involving guarantees must be in writing to be enforceable under the statute of frauds. Therefore, if Dayna is acting as a guarantor for Chocolate! Chocolate!'s loan from Evermore, the contract must be in writing to be enforceable.