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A guarantees to B the payment of a bill of exchange by C, the acceptor. The bill is dishonoured by C.…

The Illustration to section 128 makes A liable "not only for the amount of the bill, but also for any interest and charges which may have become due on it". This follows…

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A guarantees to B the payment of a bill of exchange by C, the acceptor. The bill is dishonoured by C. Nothing in the guarantee limits A's liability. For what is A liable to B?

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Correct answer A

The Illustration to section 128 makes A liable "not only for the amount of the bill, but also for any interest and charges which may have become due on it". This follows from the rule that the surety's liability "is co-extensive with that of the principal debtor", so A owes whatever C owes. B need not first proceed against C, since the surety's liability arises on the principal debtor's default.

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