Question

2 multiple choice 1 point
tuan is president and sole shareholder of entertainment, inc. entertainment, inc. wishes to borrow money, but to do so, the bank requires tuan to orally agree to pay the debt of the corporation if entertainment, inc. cannot. tuans guarantee to repay is:
enforceable under the parol evidence rule.
enforceable because there is an insurable interest.
enforceable because of the leading object rule.
unenforceable because it is a collateral promise.

Explanation:

Under contract law, a collateral promise (a promise to answer for the debt of another) generally needs to be in writing to be enforceable. Here, Tuan's oral guarantee is a collateral promise. The parol evidence rule is about excluding prior or contemporaneous oral statements that contradict a written contract (not relevant here). Insurable interest is about having an interest in property or life (not relevant). The leading object rule is an exception where if the main purpose of the guarantor's promise is for their own economic benefit, an oral promise might be enforceable. But since Tuan is the sole shareholder and the company is borrowing (not a clear own - economic - benefit - only situation for the leading object rule), and it's a collateral promise, the general rule (statute of frauds requiring writing for collateral promises) applies.

Answer:

unenforceable because it is a collateral promise.