Glannon Guide to Commercial and Paper Payment Systems: Learning Commercial and Paper Payment Systems Through Multiple-Choice Questions and Analysis (Glannon Guides Series) by McJohn Stephen M

Author:McJohn, Stephen M.
Language: eng
Format: epub
Publisher: Aspen Publisher
Published: 2015-02-09T16:00:00+00:00

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QUESTION 3. Standby. Lili purchases an airplane from Wright on credit. To get the deal, Geiger co-signs the promissory note with Lili, listed as “Guarantor.” Wright delivers a plane that will fly only for short distances and only on windy days. Lili refuses to pay, so Wright seeks the money from Geiger. Geiger likewise refuses to pay because of the defective plane. Wright responds, “You are a Guarantor, someone who guarantees the debt will be paid. You got what you were promised. You signed so I would agree to the transaction. If Lili has complaints about the plane, that's between her and me.” Can Geiger raise Lili's defense against enforcement?

A. No. A party can only raise their own defenses.

B. No. A guaranty is an unconditional promise to pay. That's what “guaranty” means.

C. Yes. An accommodation party may raise the defenses of the accommodated party.

D. Yes. Lili and Geiger are legally identical.

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