[Rough Start] Allison, who just graduated from college, wanted to buy a new car. However, she did not have much of a credit history, and the bank would not give her a loan unless she had a cosigner who agreed to be liable on the loan along with Allison. Allison's father cosigned with Allison on her loan at the bank. Allison also wanted to start a real estate business. She needed funds with which to do so. Her boyfriend, Sean, promised the bank, in writing that he would pay Allison's start-up loan for the real estate business if Allison did not do so. Unfortunately, Allison did not make any money in the real estate business. She went bankrupt along with Sean, who had been acting as her receptionist.
-The agreement entered into between Allison's father and the bank is called what?

Question

Quizplus · Accepted Answer

A suretyship involves a third party (Allison's father in this case) agreeing to be primarily liable with the borrower (Allison) for the repayment of the borrower's debt. This means if Allison fails to pay, the bank can directly demand payment from the father without first having to exhaust remedies against Allison.

[Rough Start] Allison, Who Just Graduated from College, Wanted to Buy