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Question

A introduces B to C as a partner in his business. B, in fact, was not a partner but he did not deny the statement. C advanced a loan to A. A could not repay the loan. C can hold B responsible for the repayment of loan because _________________.

A
B is a sleeping partner
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B
B is a sub-partner
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C
B is a dormant partner
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D
B is a partner by estoppel
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Solution

The correct option is D B is a partner by estoppel
According to the Partnership Act, a partner by estoppel refers to the partner who verbally or in written or through some conduct represents himself or knowingly permits himself to be represented as a partner in a firm and taking advantage of the goodwill of the firm. These kind of partners are liable to all the third parties arose due to them. Therefore, B is a partner by estoppel.

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