Please answer question 1 c

ASSIGNMENT TWO (2) TOTAL MARKS: 100 ANSWERALL QUESTIONS MS WS LUPALEZWI Note: All assignments are to be typed using ONLY Times New Roman, font size 12 with one and half spacing. Any assignments that are not typed will NOT be accepted for marking. The entire assignment must NOT exceed fifteen (10) pages in total. Any violation of this rule will result in penalization Question One (1) [60 Marks] a) Describe the relationship between a surety, the creditor and the principal (4 Marks) b) A suretyship Agreement is very unique. Discuss the rationale of this type of contract (6 Marks) c) Read the following scenario then draft a suretyship Agreement. (50 marks) Anna is a successful business woman. Anna enjoys benefits of owning a commercial enterprise by accessing loans and other benefits which come with setting up an entity. Because of the nature of Anna's business (Private company), her creditors requires that someone else stands in the gap just in case Anna fails to pay some of her creditors. Anna's best friend Patricia is a multi- millionaire and has agreed to "shield' her friend from all of her debts. However, one of Anna's creditors (Peach CC) has asked that this whole arrangement be put in writing. Instruction: Assist the Parties, while setting out clearly which Party does which function by drafting a Suretyship Agreement to that effect. Your contract may not exceed 3 pages. All requirements for a valid contract need to be complied with. Question Three (3) [25 Marks) a) Explain what you understand by a credit agreement and why credit agreements remain so vital in commercial transactions. (4 Marks) Page 12 of 17