A grandson asked to borrow $2,000 from his grandmother. She told him that she did not have the money but that she would ask a friend to lend him the money. The friend agreed on the condition that the grandmother would guarantee the loan. After the grandmother sent an unsigned letter to her friend that outlined the terms of the loan and her agreement to guarantee its repayment, the friend made the loan. When the loan came due and the grandson was unable repay it, the friend demanded that the grandmother make good on her promise. When she refused to do so, the friend filed an action in small claims court against the grandmother. What is the grandmother's best defense to this action?
Answers:
A. The friend did not give the grandmother notice that he had accepted her offer to guarantee the loan.
B.The Statute of Frauds prevents enforcement of the grandmother's promise because of the amount of the loan.
C. The grandmother did not sign the letter containing her promise to guarantee the loan.
D. The grandmother did not receive consideration in exchange for her promise to guarantee the loan.

Suretyship is a three-party contract, that states that one party who is a guarantor normally promises the obligee or a second party that the surety will be responsible for any debt of a third party resulting from the principal's failure to pay as decided.

This contract must be signed by the party to be charged but in the given case grandmother had not signed the letter that has no written promise to act as a guarantee of the loan her friend give to her grandson, the Statute of Frauds would prevent enforcement of her promise.