A ________ Exists When the Purpose of the Promisee in Requiring

question 57

Multiple Choice

A ________ exists when the purpose of the promisee in requiring a promisor's performance to be made to a third person is to fulfill a legal obligation of the promisee to the third person.

• A)void contract
• B)quasi-contract
• C)creditor-beneficiary contract
• D)donee-beneficiary contract

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Definitions:

Purchase Money Security Interest (PMSI)

A legal claim that allows a lender to repossess or foreclose on property if the borrower defaults on the loan used to purchase the property.

Collateral

Property or assets that a borrower offers to a lender as security for a loan. If the borrower defaults, the lender may seize the collateral to recoup its losses.

Automatic Stay

A legal provision that halts actions by creditors to collect debts from a debtor who has declared bankruptcy, giving the debtor temporary relief.

Chapter 7

A type of bankruptcy that involves the liquidation of a debtor's non-exempt assets by a trustee to pay creditors.