Question 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.
Question 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.
Question 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.
C) A contract of guaranty must be written or it is not enforceable.
D) A guarantor has no right of subrogation.
Question 4. Deb borrows $10,000 Carl, using her deposit account at Big Bank as collateral. How can Carl perfect his interest in the account?
A) Filing a financing statement in the appropriate public office.
B) Becoming Big Bank's customer for the deposit account.
C) Agreeing with Big Bank and Deb that the bank will comply with his instructions regarding funds in the account.
D) Both B and C..
Question 5. Which of the following is most likely to be perfected by the secured party's possession of the collateral?
A) A security interest in inventory.
B) A security interest in consumer goods.
C) A security interest in general intangibles.
D) A security interest in equipment.