Bill and Cody agree to guarantee Dave's debt. Bill's maximum liabil?ity is $60,000, and Cody's is $40,000. Dave owes $40,000 and is in default. Bill pays the creditor the entire amount. In the ab?sence of an agree?ment to the contrary, Bill can recover from Cody
A) $0.
B) $16,000.
C) $20,000.
D) $40,000.

Question

Quizplus · Accepted Answer

Bill paid $40,000, and Cody's maximum liability is $40,000. Therefore, Bill can recover $40,000 - $20,000 = $20,000 from Cody.

Bill and Cody Agree to Guarantee Dave's Debt