Which of the following statements regarding the securing of debt is true?
A) The term guarantee, otherwise known as an indemnity, refers to a primary debt obligation.
B) To avoid problems related to consideration, lending institutions often require that guarantees be placed under seal.
C) In every province, there is now a requirement that a guarantor appear before a notary public.
D) Because of the principle of caveat emptor, a creditor has no obligation to protect the interests of a guarantor.
E) As guarantees are mere formalities, there is little point in getting legal advice prior to executing one.

Question

Quizplus · Accepted Answer

To avoid issues related to the legal requirement of consideration in contract law, lending institutions often require guarantees to be formalized under seal. This practice helps ensure the enforceability of the guarantee without the need for additional consideration.

Which of the Following Statements Regarding the Securing of Debt