Davis owes a $5 million debt to the C Bank. He also owes $2 million to Samuel. However right now, Davis is having trouble paying either loan. C Bank is willing to finance Davis' debt, but only if Samuel co-signs. Samuel, who fears that he'll get nothing on his $2 million loan if Davis doesn't get some help from the bank, is willing to do so. Thus, C Bank, Samuel and Davis complete a three-party agreement in which the bank agrees to finance the $5 million debt, Davis agrees to pay it back at a certain rate over a certain term, and Samuel agrees to pay the debt "in the event that Davis first defaults." Is this agreement covered by the statute of frauds? Why or why not?

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The Answer of Davis owes a $5 million debt to the C Bank. He also owes $2 million to Samuel. However right now, Davis is having trouble paying either loan. C Bank is willing to finance Davis' debt, but only if Samuel co-signs. Samuel, who fears that he'll get nothing on his $2 million loan if Davis doesn't get some help from the bank, is willing to do so. Thus, C Bank, Samuel and Davis complete a three-party agreement in which the bank agrees to finance the $5 million debt, Davis agrees to pay it back at a certain rate over a certain term, and Samuel agrees to pay the debt "in the event that Davis first defaults." Is this agreement covered by the statute of frauds? Why or why not?

Davis Owes a $5 Million Debt to the C Bank