Legal English Challenge 2023 – Day 20

Read the short text about surety or guaranty agreements, then select the correct option from the list to complete (1) ….. to (10) ….. .

Based on a surety or a guaranty agreement, the surety or the guarantor undertakes ___1___ of the original debtor,  called the ___2____, if they fail to pay back the loan. However, the creditor has different rights under a surety agreement and a guaranty agreement.

In the case of a surety agreement, the creditor may ___3____ both the principal and the ___4___ at the same time, since their liability for the default is ___5___. In the case of a guaranty agreement, the ___6___’s liability is ___7___, i.e. the creditor first has to attempt to collect the debt from the principal before turning to the guarantor for payment. 

A surety or guaranty agreement, like any contract, requires ___8____, adequate consideration, definiteness of performance, and a consensus ad idem (meeting of the minds). Since they cannot exist without a ___9___, if the primary debt obligation has been fully satisfied, is void or is illegal, the surety or guaranty of the debt obligation can also ___10___. A surety or guaranty agreement must be in writing, signed by the guarantor(s) and delivered to the creditor.

Now, press the START button to select the correct option from the list to complete (1) ….. to (10) ….. .