Four partners own the used car dealership, Square Deal Ltd. The company needs more working capital so the partners went to the bank officer for a loan. The bank officer stipulated that she would approve the loan application if each of the owners sign a personal guarantee on the loan. This was agreed to by the four but when it came time for signing, one of the partners was on an extended trip to Asia and couldn't be reached. The other three signed the document. Based on the three guarantees, the bank decided to go ahead with the loan to Square Deal Ltd. Are the guarantees enforceable against the three partners?
A) No, since the condition precedent was never met.
B) No, because there was a definite lack of consideration.
C) Yes, since the bank extended the loan without objection from the partners.
D) Yes, since there was good consideration given.
E) No, because the partner in Asia had the "deep pockets".
Correct Answer:
Verified
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