Need help with the attached questions.
1. The City of Melonville hires Ace Construction Company to build its new City Hall. Integrity Insurance agrees to be liable for Ace's performance of its contract. The City of Melonville has Integrity and Ace both sign the contract which provides that Ace and Integrity will be "jointly and severally" liable for the performance. Which of the following statements regarding the contract is most accurate?
A) Integrity is acting as a guarantor.
B) Integrity can only be held to his guarantee after Ace defaults.
C) Integrity is acting more as a surety than a guarantor.
D) Both A and B.
C) Integrity is acting more as a surety than a guarantor. He has provided the surety at the time the original contract was formed. This differentiates between a surety and a guarantee.
2. Which of the following makes the promisor a surety rather than a guarantor?
A) "I promise to pay D's debt in the event that D first defaults."
B) "I promise to pay D's debt and am primarily liable along with D on that debt."
C) Both of the above.
D) Neither of the above.
A) "I promise to pay D's debt in the event that D first defaults." This statement places the onus of ascertaining the default on the person making the promise. This differentiates between a surety and a guarantee.
3. Which of the following is true of a guaranty (as opposed to suretyship) relationship?
A) The guarantor is primarily liable along with the principal debtor.
B) A guarantor must be compensated.
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