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:

Real Estate

Property consisting of land and the buildings on it, along with its natural resources.

Economic Well-Being

The overall state of economic health and prosperity experienced by individuals or a community, often measured by factors like income, employment, and access to goods and services.

Military Expenditures

The financial resources a country allocates for its military to fund defense and security functions, including salaries, equipment, operations, and maintenance.

National Income Accountants

Professionals who compile and analyze data on a country's economic activity, measuring factors like GDP, national income, and investment.