Fact Pattern 33-1 (Questions 14-15 apply)
Alpha Corporation needs to borrow money to meet its payroll.Blair,Alpha's owner,asks City Bank to loan Alpha the funds.
-Refer to Fact Pattern 33-1.If City Bank insists that Blair sign the loan ap?plica?tion to assume liability for payment only if Alpha defaults,Blair will be

Question

Quizplus · Accepted Answer

If Blair signs the loan application to assume liability only if Alpha defaults, she would be secondarily liable. This means that City Bank would first seek repayment from Alpha and only if Alpha is unable to pay, Blair would be responsible for paying back the loan. This type of liability is known as contingent liability.

Fact Pattern 33-1 (Questions 14-15 Apply)