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A collateral contract is one in which_______

O is related to real estate
O is a marriage contract
O one answers for the debt of another
O takes less than a year to complete

User Allard
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1 Answer

7 votes

Final answer:

A collateral contract is one in which one person agrees to answer for the debt of another, often involving a cosigner and the use of collateral. Therefore correct option is C

Step-by-step explanation:

A collateral contract is a secondary agreement that accompanies the primary contract, offering additional assurances or terms that are related to the main contract. In the context of your question, the correct answer is a contract where one answers for the debt of another, which is closely related to the concept of a cosigner.

A cosigner is someone who legally pledges to repay some or all of the money on a loan if the original borrower does not. This concept is important to understand, as collateral contracts often involve a promise to ensure the satisfaction of another's debt, sometimes backed by collateral, which is something valuable that a lender can seize if the loan is not repaid.

User Abdul Wadood
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