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Question
AAA Software Company borrows $10,000 from Best Term Loans, Inc., but cannot repay the loan when it comes due. Best Term refuses to extend the time for repayment unless AAA can provide an acceptable surety. Commercial Investments Corporation agrees to act as a surety for the loan after AAA offers the firm a discount on software and shows Commercial Investments financial statements, compiled with Best Term's assistance, that misrepresent AAA's financial situation. Later, after Commercial Investments uses the discount to buy software, AAA again defaults on repayment of the loan, and Best Term files a suit against Commercial Investments to collect the amount of the debt. Is Commercial Investments liable? Why or why not?Answer
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