Question

Select 1 of the scenarios and:

1. Identify the appropriate Rule

2. Apply the Rule

3. Explain your Conclusion

Option 1: Winding Up

Dan and Lori Cole operated a Curves franchise exercise facility in Angola, Indiana, as a partnership. The firm leased commercial space from Flying Cat, LLC, for a renewable three-year term and renewed the lease for a second three-year term. But two years after the renewal, the Coles divorced. By the end of the second term, Flying Cat was owed more than $21,000 on the lease. Without telling the landlord about the divorce, Lori signed another extension. More rent went unpaid. Flying Cat obtained a judgment in an Indiana state court against the partnership for almost $50,000. Can Dan be held liable? Why or why not? Explain thoroughly.

Answer 1

In my opinion, Dan cannot be held liable because Lori signed another extension without any knowledge to Dan about this and moreover Lori hid a critical information from the landlord that the two of them were divorced. In a partnership agreement, the consent of both the parties is required to make any business decisions and since Dan had no idea about Lori signing an extension, hence he would not be liable. Under this situation, Lori would be held liable since she was the one who signed for extension without Dan knowing about it.