In Which of the Following Cases Can a Surety Avoid

question 27

Multiple Choice

In which of the following cases can a surety avoid liability for a principal's default?

• A) If the principal is a minor and therefore lacks the capacity to contract
• B) If the principal has filed for bankruptcy
• C) If the principal is induced to contract with the seller-creditor by fraud or duress
• D) If the principal is insane

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Definitions:

Add New

A command or option in software applications for creating a new file, record, account, or other items.

Allowance Method

A financial approach used to anticipate and adjust for potential credit losses in accounts receivable.

Uncollectible Accounts Expense

An expense recorded by businesses to account for receivables that are considered irrecoverable, indicating customers are unlikely to pay their debts.

Sales Receipts

Documents that provide detailed information about a sale transaction, including the date of sale, items sold, and amounts charged.