[nib]

Friends ,

please give me some example of “consideration ” for surety ship to understand following question and its answer .

Which of the following defenses by a surety will be effective to avoid liability?

Correct answer — Lack of consideration to support the surety undertaking

[wombataholic]

Consideration is just about anything of value you can think of. Money, cars, copyrights, painting someone's house, etc.

A lack of consideration just means that the person acting as surety received nothing to act as surety.

Licensed CPA
Passed each section on the first try with Ninja Notes/MCQ/Audio

[nib]

1)so above question n answer is compensatory type where consideration = compensation .?
2) In above example initially consideration was existed so there was liability existed .Then consideration was destroyed or reduced , because of that it said ” lack of consideration and so it can avoid liability ” .
2) in non compensatory , there wont be any consideration involved .?

[rocsage]

1)right
2)right; this remains a matter of contract law; if a someone charges $50 for a service, giving that person $30 will not, on a stand-alone basis, entitle you the service
3)as a law layman, I'd say pro bono services of this nature, like gifts, would not create liability for non-performance.

[nozima tojimatova]

Hi all,
why is A correct choice? There are 2 types of sureties: compensated and non-compensated sureties. Can anyone please explain? Here is a question:
Which of the following defenses by a surety will be effective to avoid liability?
A. Lack of consideration to support the surety undertaking
B. Insolvency in the bankruptcy sense by the debtor
IncorrectC. Incompetency of the debtor to make the contract in question
D. Fraudulent statements by the principal debtor that induced the surety to assume the obligation and that were unknown to the creditor

[Author]

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