NC_Suretyship_Flashcards

Question 1

Can C refuse cash payment?

Answer 1

NO, refusal of cash payment is per se unreasonable.

Question 2

Effect of C’s unreasonable refusal of D’s performance

Answer 2

Discharge of S to extent performance would have discharged D’s obligation

Question 3

Effect of C’s unreasonable refusal of S’s performance

Answer 3

Discharge of S to extent refusal of tender causes S a loss.

Question 4

Defenses of D that S cannot assert

Answer 4

The type of risks sureties serve to defend against:

(1) Infancy;
(2) Capacity; or
(3) Bankruptcy/Insolvency

Question 5

NC Rule: When can S requre creditor to collect from D?

Answer 5

In NC (special rule) a S may require C to sue D for collection if:

(1) a right of action has accrued on the K (i.e. a missed payment); AND
(2) S believes D likely to become insolvent or D likely to leave state without discharging the K

Question 6

Must a C give S notice of acceptance if C acts based on S’s offer and enters transaction with D?

Answer 6

Not unless such notice is identified as a condition to acceptance.