Petro Refinery asks Quality Bank for a loan to increase its inventory. Quality requires Roma, Petro's president, to sign a personal guaranty to pay the debt if Petro defaults. The guaranty is required to be in writing because

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The requirement for the guaranty to be in writing is due to the Statute of Frauds, which mandates certain agreements, including guaranties, to be in writing to be enforceable. The main purpose rule, which allows an oral guaranty if the guarantor's primary intent is to secure a personal benefit, does not apply here, indicating the need for a written guaranty.

Petro Refinery Asks Quality Bank for a Loan to Increase