Amy, Ben, Carol and David are in partnership carrying on the business of musical productions. They are new in the industry, and so do not construct a written partnership agreement. David thinks the partnership could benefit from better sound equipment, so he approaches the bank, where he has a personal account for a loan of $100,000, saying that the loan is for the musical production business and is to be taken out in the name of the partnership. The branch manager is cautious, whilst he has known David for many years, was unaware that David had formed a partnership.

(a) It is necessary for the bank to insist on having all four (4) signatures on the loan contract.

(b) It is not necessary for the bank to insist on having all four (4) signatures on the loan contract.

(c) None of the above answers are correct.

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