In many public meetings,John has proclaimed himself to be an equal partner of Chan's partnership business.Chan's business ran into financial difficulties.John and Chan approached a creditor to obtain a loan.The creditor gave the loan based on a false presumption that John was a partner in the business too.Can John be made liable for the loan?
A)Yes,because John is a close acquaintance of Chan;thus,it is his ethical duty to help Chan during her financial trouble.
B)Yes,because John is a purported partner;public representations of his partner status make him personally liable for the debt.
C)No,because he is not legally a partner;the creditor should have checked the partnership agreement before advancing the loan.
D)No,because John did not participate in the business;he was thus not a member of the partnership business.

Question

Quizplus · Accepted Answer

A purported partner is liable on contracts entered into by third parties on their belief that he was a partner.If a person makes a public representation that she is a partner of another,the purported partner is liable to any third person who relies on the representation,even if the purported partner is not aware of the reliance.

In Many Public Meetings,John Has Proclaimed Himself to Be an Equal