Asked by
Allie Smith
on Nov 10, 2024
Verified
Which of the following statements regarding the securing of debt is true?
A) The term guarantee, otherwise known as an indemnity, refers to a primary debt obligation.
B) To avoid problems related to consideration, lending institutions often require that guarantees be placed under seal.
C) In every province, there is now a requirement that a guarantor appear before a notary public.
D) Because of the principle of caveat emptor, a creditor has no obligation to protect the interests of a guarantor.
E) As guarantees are mere formalities, there is little point in getting legal advice prior to executing one.
Guarantee
A written commitment whereby a guarantor agrees to pay a debt if the debtor does not.
Indemnity
A contractual obligation of one party to compensate for the loss or damage incurred by another party.
- Acquire knowledge about the variances between guarantees, indemnities, and alternative forms of security used in financial transactions.
- Acquire knowledge on the functioning of continuous guarantees and the consequences of adjusting loan contracts.
Verified Answer
FS
Learning Objectives
- Acquire knowledge about the variances between guarantees, indemnities, and alternative forms of security used in financial transactions.
- Acquire knowledge on the functioning of continuous guarantees and the consequences of adjusting loan contracts.