Which of the following statements is true of a guaranty contract?
A) The guaranty contract is between the guarantor and the debtor.
B) A guaranty contract need not be in writing.
C) The guarantor's liability is secondary.
D) The original contract is between the creditor and the guarantor.

Question

Quizplus · Accepted Answer

In a guaranty contract, the guarantor's liability is secondary, meaning that they are only obligated to pay if the debtor defaults on their obligation. The guaranty contract is between the guarantor and the creditor, not the debtor. A guaranty contract may be in writing or oral, but it is recommended that it be in writing to avoid disputes. The original contract is between the creditor and the debtor, and the guarantor agrees to be responsible for the debtor's obligations under the contract.

Which of the Following Statements Is True of a Guaranty