A Guaranty Contract Must Be in Writing to Be Enforceable

question 22

True/False

A guaranty contract must be in writing to be enforceable.

---

Definitions:

Investing

Distributing financial resources with the aim of earning revenue or gains.

Covenants

Agreements or clauses, especially in contracts and property leases, that stipulate actions the parties must perform or avoid.

Monitoring

The process of systematically observing, checking, and recording activities or data to ensure standards are met or progress is being made.

Moral Hazard

The situation where one party is more likely to take risks because they do not bear the full consequences of their actions.