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.If Evermore insists that Dayna sign the loan applica?tion,making her personally liable for payment only if Chocolate! Chocolate! de?faults,Dayna will be
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.If Evermore insists that Dayna sign the loan applica?tion,making her personally liable for payment only if Chocolate! Chocolate! de?faults,Dayna will be
A)a surety.
B)a lienor.
C)a garnishee.
D)a guarantor.

Quizplus · Accepted Answer

If Dayna signs the loan application making her personally liable for payment only if Chocolate! Chocolate! defaults, she will be a guarantor. A guarantor is a person who agrees to be responsible for paying back a loan if the borrower does not. In this case, Chocolate! Chocolate! is the borrower and Dayna is agreeing to pay back the loan only if Chocolate! Chocolate! fails to do so.