Robertson and Enrickson Prepared an Agreement to Enter into a Partnership

question 41

Essay

Robertson and Enrickson prepared an agreement to enter into a partnership. Both of the partners realized that outside capital was needed for the firm to begin operations; however, they also realized that their individual and combined credit ratings would not attract sufficient funds. In order to improve the new partnership's ability to attract investment capital, and with the approval of Enrickson, Robertson added his friend Thompson's name to the partnership agreement. Thompson, a well-known personality from a family of means, was not asked to be a partner and knew nothing of Robertson's and Enrickson's actions. Upon seeing Thompson's name on the partnership agreement, a local bank readily agreed to advance Robertson and Enrickson the total sum required to begin operations. The partnership has now failed, and the bank would like to hold Thompson, Robertson and Enrickson liable for the amount of the loan. Will the bank recover from Thompson, Robertson and Enrickson?

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Definitions:

Information

Data that is organized, processed, or presented in a given context to make it meaningful or useful.

Social Loafing

The tendency for individuals to expend less effort on a task when working in a group compared to when working alone.

Group Polarization

The tendency for a group to make decisions that are more extreme than the initial inclination of its members.

Diffusion Of Responsibility

A sociopsychological phenomenon whereby a person is less likely to take responsibility for action or inaction when others are present, often used to explain the bystander effect.