Tom and Bill are partners in Tough Trucks Towing.James is not a partner.In dealing with Fred,James holds himself out to be a partner in Tough Trucks Towing and Fred contracts to have Tough Trucks Towing tow some vehicles for him.If Tough Trucks fails to tow the vehicles,a court may conclude that
A)a partnership by estoppel exists and James is liable to Fred.
B)no partnership exists and James is not liable to Fred.
C)a partnership by estoppel exists and Fred has all partnership rights.
D)no partnership exists,but Tom and Bill are liable to Fred.

Question

Quizplus · Accepted Answer

James has held himself out to be a partner in Tough Trucks Towing, which creates a partnership by estoppel. This means that James will be liable to Fred for the failure to tow the vehicles, even though he is not actually a partner. Tom and Bill may also be liable to Fred, but the fact that James held himself out as a partner makes him personally liable as well.

Tom and Bill Are Partners in Tough Trucks Towing