Dean, a partner in Equipment Sales, applies for a loan with Farmers Bank allegedly on Equipment's behalf but without the authorization of the other partners. The bank knows that Dean is not authorized to take out the loan. Liability in the event of default will be imposed on

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Dean will be held liable because he acted without the authorization of the other partners, and the bank was aware of this lack of authorization. In partnership law, actions taken by a partner without the necessary authority that bind the partnership require that the partner acting unilaterally be held responsible, especially when the third party (in this case, the bank) is aware of the lack of authority.

Dean, a Partner in Equipment Sales, Applies for a Loan