Author Question: An investment in a common enterprise subject to the securities law includes those where each ... (Read 61 times)

casperchen82 · **on:** Jun 24, 2018

An investment in a common enterprise subject to the securities law includes those where each investor owns a specific part of the organization being financed, such as a construction partnership.
a. True
b. False
Indicate whether the statement is true or false

Question 2

Guaranty. A. J. Kellos Construction Co was the general contractor for the construction of a building in Georgia. Kellos entered into a subcontract with Roofing Specialists,. Inc, to build the roof. Balboa Insurance Co executed a bond in favor of Kellos, underwriting Roofing Specialists' performance of its contract. When the state architect condemned the roofing, Kellos sued Balboa on the bond for damages resulting from Roofing Specialists' default on the contract. Was Balboa's bond in favor of Kellos an insurance contract or a guaranty contract?

izzat · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

FALSE

Answer to Question 2

Guaranty
The bond executed by Balboa was not a contract of liability insurance. Instead, the case presents three parties in a contract for a guaranty. Roofing Specialists was the obligor in that it promised to construct the roof. Kellos was the obligee because the promise was made to it. And Balboa was the guarantor in that payment of the bond was contingent on the default of the obligor. Kellos was allowed to recover from Balboa Insurance Co.