Essay
Sam needs a loan for his carpet business.The bank agrees to make him a loan provided that his wife Pam gives the bank a personal guarantee agreeing to be responsible is there is default under the loan agreement.Pam signs a guarantee for the loan.Sam defaults under the loan agreement and the bank sues Pam on the personal guarantee.Pam's defence is that there was no consideration for the guarantee because she had no ownership or financial interest in her husband's business,and she received none of the loan proceeds.Is she correct that she is not bound by the guarantee because there is no consideration?
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In order for there to be consideration,i...View Answer
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