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Fact Pattern 32-1 Petro Refinery Asks Quality Bank for a Loan

Question 44

Multiple Choice

Fact Pattern 32-1 Petro Refinery asks Quality Bank for a loan to increase its inventory. Quality requires Rob, Petro's president, to sign a personal guaranty to pay the debt if Petro defaults. Meanwhile, to make a sale of refined oil to Slick Lubricants Inc., Petro asks Slick's outside accountant Tina to co-sign a credit application.
Refer to Fact Pattern 32-1. Rob is a guarantor. The guaranty is required to be in writing because


A) the debtor has a right of redemption.
B) the co-signer has a right of contribution.
C) the main purpose rule applies.
D) the main purpose rule does not apply.

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