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Fred and Ginger Are General Partners in a Business

Question 46

Multiple Choice

Fred and Ginger are general partners in a business.They decide to purchase a building for the partnership.Ginger will put up the money for the building,and Fred will complete the remodeling.While inspecting the building,Fred is informed that the building is packed full of asbestos.He fails to tell Ginger of the presence of the substance.They buy the building and go into business.During remodeling of the building,people from the neighborhood begin complaining about the dust from the building.Some of them even threaten to sue! Who is liable?


A) Neither is liable personally,nor is the partnership,as they did not put the substance in the building.
B) Fred will have liability because he was put on notice of the presence of the substance. Ginger will not be liable because she did not have actual knowledge.
C) Ginger will be liable because she is the one that purchased the building. Fred will not be liable. Even though he had actual knowledge,he did not purchase the building.
D) Both will be liable by virtue of the fact that they are partners.

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