Fact Pattern 29-1
Petro Oil Refinery asks Quality Bank for a loan to increase its oil inventory. Quality requires Robin, Petro's president, sign a personal guaranty to pay the debt if Petro defaults. Meanwhile, to sell fifty barrels of refined oil to Slick Lubricants, Inc., Petro asks its outside accountant Tina to co-sign a credit application.
-Refer to Fact Pattern 29-1. If Tina signs the application only after language is included that requires Petro to exhaust its legal remedies against Slick before looking to her, then Tina is
A) a surety.
B) a lienor.
C) a guarantor.
D) a creditor.

Question

Fact Pattern 29-1
Petro Oil Refinery asks Quality Bank for a loan to increase its oil inventory. Quality requires Robin, Petro's president, sign a personal guaranty to pay the debt if Petro defaults. Meanwhile, to sell fifty barrels of refined oil to Slick Lubricants, Inc., Petro asks its outside accountant Tina to co-sign a credit application.
-Refer to Fact Pattern 29-1. If Tina signs the application only after language is included that requires Petro to exhaust its legal remedies against Slick before looking to her, then Tina is​
A) ​a surety.
B) ​a lienor.
C) ​a guarantor.
D) ​a creditor.

Quizplus · Accepted Answer

Tina is a guarantor because she has agreed to be responsible for the debt only if Petro fails to exhaust its legal remedies against Slick first. This condition distinguishes her role from that of a surety, who would be immediately liable.

Fact Pattern 29-1 Petro Oil Refinery Asks Quality Bank for a Loan to a Loan