Ross and Sally agree to guarantee Tim's debt. Ross's maximum liabil?ity is $30,000, and Sally's is $20,000. Tim owes $20,000 and is in default. Ross pays the creditor the entire amount. In the ab?sence of an agree?ment to the contrary, Ross can recover from Sally
A) $8,000.
B) $10,000.
C) $20,000.
D) nothing.

Question

Quizplus · Accepted Answer

Ross paid the entire amount of $20,000, which is within his maximum liability of $30,000. Since Sally's maximum liability is $20,000, Ross can recover half of what he paid, which is $10,000.

Ross and Sally Agree to Guarantee Tim's Debt