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| Ford was unable to repay a loan from City Bank when due. City refused to renew the loan to Ford unless an acceptable surety could be provided. Ford asked Owens, a friend, to act as surety on the loan. To induce Owens to agree to become a surety, Ford made fraudulent representations about Ford’s financial condition and promised Owens discounts on merchandise sold at Ford’s store. Owens agreed to act as surety and the loan was made to Ford. Subsequently, Ford’s obligation to City was discharged in Ford’s bankruptcy and City wishes to hold Owens liable. Owens may avoid liability A. Because the arrangement was void at the inception. B. Because the discharge in bankruptcy will prevent Owens from having a right of reimbursement. C. If Owens was an uncompensated surety. D. If Owens can show that City Bank was aware of the fraudulent representations. |