A continuing guaranteeA) allows a creditor to advance further funds without affecting the obligation of the guarantor to pay in the event of default.B) is a primary obligation of a third party to pay a debt along with a debtor.C) is a written commitment not to pursue a legal claim against another.D) is an equitable principle assuring that when security is repossessed, there will be a period of time during which the debtor can still make payment.E) allows a breaching party to pay an amount specified in a contract, rather than facing a lawsuit for damages.

Question

A continuing guaranteeA)  allows a creditor to advance further funds without affecting the obligation of the guarantor to pay in the event of default.B)  is a primary obligation of a third party to pay a debt along with a debtor.C)  is a written commitment not to pursue a legal claim against another.D)  is an equitable principle assuring that when security is repossessed, there will be a period of time during which the debtor can still make payment.E)  allows a breaching party to pay an amount specified in a contract, rather than facing a lawsuit for damages.

Re'Ari Ritter · Accepted Answer

Final Answer : A, Explanation :  A continuing guarantee is specifically designed to allow a creditor to continue advancing funds or extending credit to a debtor with the assurance that the guarantor will remain liable for new debts as they arise, up to a certain limit or until the guarantee is revoked. This is distinct from a specific guarantee, which is limited to a single transaction or debt.

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