Country Bank believed that Mandy and Kay were partners in an e-business. Mandy and Kay were not partners. Mandy owned the business as a sole proprietor. Kay, however, was a close friend of Mandy's. When Mandy visited Country Bank in an effort to obtain a $10,000 loan, Kay went with her. During the conversation with the banker, Mandy referred to Kay as "my partner." Country Bank made the business
loan believing that Mandy and Kay were partners. Mandy defaulted on the loan. Country Bank claims that both Mandy and Kay are liable on the loan. Is Country Bank correct in doing so?
a. Yes. This illustrates a partnership by estoppel.
b. No. Kay was a dissociated partner.
c. No. Kay was not a partner in the business.
d. No. There was no intent to have a partnership.
a
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