In which of the following cases can a surety avoid liability for a principal's default?
A) If the principal is a minor and therefore lacks the capacity to contract
B) If the principal has filed for bankruptcy
C) If the principal is induced to contract with the seller-creditor by fraud or duress
D) If the principal is insane

Question

Quizplus · Accepted Answer

A surety can avoid liability to a creditor by using the following defenses: (1) lack or failure of consideration, (2) inducement of the contract by fraud or duress, and (3) breach of contract by the other party. However, the personal defenses of the principal cannot be used by the surety. These personal defenses include lack of capacity, such as minority or insanity, and bankruptcy.

In Which of the Following Cases Can a Surety Avoid