Suretyship Agreements

Question 1

The golden rule of interpreting suretyship agreements

Answer 1

RTFB = Read the fucking bond (or other written instrument that creates the suretyship)

Question 2

Contract Formation of Surety Arrangement?
Offer
Acceptance
Consideration

Answer 2

The person who offers to be the surety is the offeror?
-A promise to cover the debt by the surety will be the offer

Must be accepted by creditor or debtor

Consideration will be the underlying contract

Question 3

In North Carolina provides that no action may be brought upon any special promise to answer for:

Answer 3

The debt, default, or miscarriage of a promise

Unless the promise or agreement is signed by the surety

Question 4

If there is fraud upon the surety by the creditor?

Answer 4

Then it is voidable

Question 5

If there is fraud upon the surety by the debtor or a third party?

Answer 5

It is voidable unless

-The creditor detrimentally relied

Question 6

For the statute of frauds to be complied with for a surety, what has to be in writing?

Answer 6

The surety’s signature acknowledging the agreement

-it is irrelevant if the underlying contract is in writing

Question 7

The main purpose, or “leading object,” rule states that

Answer 7

If the main purpose of the surety’s promise is for the benefit of the surety
+
Guarantee is incidental to surety’s purpose

Then, don’t need statute of frauds

Question 8

When does statute of frauds not apply to surety?

3

Answer 8

1. leading object/main purpose rule
2. Agreements between debtor and surety
3. Agreements between co-sureties

Question 9

Any ambiguity in a surety agreement will be

Answer 9

construed against the drafting party