Abco Corp. is building a new office tower. Ace Plumbing Supplies refuses to provide plumbing materials on credit to the plumbing subcontractor on the building. Abco promises Ace that it will pay for the materials if the subcontractor does not. Abco's oral promise is enforceable.

Question

Quizplus · Accepted Answer

Abco's oral promise is enforceable under the "main purpose rule" or "leading object rule," which states that if the main purpose of the guarantor (in this case, Abco) in making the guarantee is to secure a personal benefit, the promise does not need to be in writing to be enforceable.

Abco Corp Is Building a New Office Tower