Question

In many public meetings, John has proclaimed himself to be an equal partner of Chan's partnership business. Chan's business ran into financial difficulties. John and Chan approached a creditor to obtain loan. The creditor gave the loan based on a false presumption that John was a partner in the business too. Can John be made liable for the loan?

A. Yes, because John is a close acquaintance of Chan; thus it is his ethical duty to help Chan during her financial trouble.

B. Yes, because John is a purported partner; public representations of his partner status make him personally liable for the debt.

C. No, because he is not legally a partner; the creditor should have checked the partnership agreement before advancing the loan.

D. No, because John did not participate in the business; he was thus not a member of the partnership business.

Answer

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