In the case Murphy Oil V Armstrong, Armstrong was the guarantor on a contract si

Question

In the case Murphy Oil V Armstrong, Armstrong was the guarantor on a contract signed between Murphy Oil and Price Oil. Murphy provided oil in the amount of $259,585.75 to Price. Price did not pay this and filed bankruptcy. In the bankruptcy proceedings Murphy received $66,246.28. Murphy filed a suit against Armstrong for the unpaid balance. Determine how your business will protect itself from a discharge of debt like this. Please identify the issues and provide an arguments for both sides of the issue. The main thing I am looking for help on is determining how a business would protect itself from a discharge debt like the one in the case of Murphy Oil v Armstrong.

Explanation / Answer

As the contract has been signed between two parties Murphy is liable to to give the money to Price.As murphy has claim bankruptcy, Armstrng is the legal guarantor. Thus price can file case against Armstrong to fetch the amount that Murphy has to given them.

Legally gurantor is the party who has the obligation to make the deal feasible and viable to both parties with all financial settlements. In this scenario Price has to take initiative to get the amount through Armstrong.

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