Village Bank believed that Spencer and Nadia were partners in an e-business. Spencer and Nadia were not partners. Spencer owned the business as a sole proprietor. Nadia, however, was a close friend of Spencer. When Spencer visited Village Bank in an
effort to obtain a $10,000 loan, Nadia went with him. During the conversation with the banker, Spencer referred to Nadia as "my partner." Village Bank made the business loan believing that Spencer and Nadia were partners. Spencer defaulted on the loan. Village Bank claims that both Spencer and Nadia are liable on the loan. Will Nadia be liable on the loan?
The bank can make a case to hold Nadia liable under partnership by estoppel. Partnership by estoppel exists when:
1 . Participants tell other people that they are partners or they allow other people to say, without contradiction, that they are partners;
2 . A third party relies on this assertion; and
3 . The third party suffers harm.
In this situation Spencer told Village Bank that they were partners and Nadia didn't contradict him. The bank relied on the fact that they were partners in extending the loan. Village Bank can probably hold Nadia liable on the loan. The bank should have protected its interest by having Nadia, as well as Spencer, sign the loan papers.
You might also like to view...
Bob's debit card was stolen on Wednesday. He notifies his bank of the theft the following morning. Meanwhile, the thief has used his card to purchase $800 worth of goods and services
Based on this scenario, which of the following is true of the Electronic Fund Transfer Act? A) Bob is liable for $50 of the $800. B) Bob is liable for $300 of the $800. C) Bob is liable for $500 of the $800. D) Bob is liable for the whole amount.
In the Monte Carlo process, values for a random variable are generated by ________ a probability distribution
A) sampling from B) running C) integrating D) implementing
You hold a portfolio made up of the following stocks:
Investment Value Beta Stock L $8,000 2.0 Stock M $18,000 1.5 Stock N $14,000 .4 If the market's expected return is 14%, and the risk-free rate of return is 5%, what is the expected return of the portfolio? A) 17.010% B) 16.700% C) 14.698% D) 15.935%
In many cases, white space in a chart can improve
A. complexity. B. readability. C. functionality. D. stability.