Subsequently fords obligation to city was discharged in, Ask an Expert

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Ford was unable to repay a loan to city bank when due. city refused to renew the loan unless an acceptable surety could be provided. ford asked owens, a friend, to act as surety on the loan. to induce ownes to agree to become a surety, ford made a fraudulent representation about ford's financial condition and promised owens discounts on merchandise sold at ford's store. owen agreed to act as surety and the loan to ford was renewed. Subsequently, Ford's obligation to city was discharged in Ford's bakruptcy and City wishes to hold Owens liable. Owens may avoid liability

A) because the arrangement was void at the inception

B) if Owen's was an uncompensated surety

C) if Owen's can show that City Bank was aware of the fraudenlt's reprenstations

D) because the discharge in bankruptcy will prevent Owen's from having a right of reimbursement

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M991431

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