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A lender advances a new loan to a son at his father’s request. At the same time, the father executes a…

The lender supplies consideration by advancing the fresh loan at the father's request. Benefit to the principal debtor can support a concurrent guarantee. The father…

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A lender advances a new loan to a son at his father’s request. At the same time, the father executes a valid promise to repay the lender if the son defaults. Assuming the other requirements of a valid guarantee are met, which statements explain sufficient consideration?

(i) The new loan supplies sufficient consideration.

(ii) The loan consideration was provided by the father.

(iii) The loan was advanced at the desire of the father as promisor.

(iv) The loan was advanced at the father’s request.

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Answer and explanation

Correct answer B

The lender supplies consideration by advancing the fresh loan at the father's request. Benefit to the principal debtor can support a concurrent guarantee. The father requests the consideration but does not himself provide the loan.

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