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

Question

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

Quizplus · Accepted Answer

Since Ed acted without the authorization of the other partners and the bank was aware of this lack of authorization, Ed would be personally liable for the loan in the event of default. The liability does not extend to Farm Equipment or Growers Bank under these circumstances.

Ed, a Partner in Farm Equipment Sales, Applies for a Loan