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Bayside Marina Company and Canoes Kayaks Inc., share officers, directors, employees, property, and equipment. In reliance on Bayside Marina's reputation, Delivery Transport Inc. contracts to perform services for Canoes Kayaks, but the firm does not pay. In terms of liability to Delivery Transport, a court is most likely to treat Bayside Marina and Canoes Kayaks as

1) a pass-through entity.
2) a natural person.
3) a tax-paying entity
4) a partnership by estoppel.

1 Answer

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Final answer:

A court is likely to treat Bayside Marina and Canoes Kayaks as a partnership by estoppel, holding both liable for unpaid services contracted by Delivery Transport due to their shared resources and the reliance on their joint reputation.

Step-by-step explanation:

In the scenario where Bayside Marina Company and Canoes Kayaks Inc. share officers, directors, employees, property, and equipment, and one company's reputation led to the creation of a contract that the other company failed to honor, a court is likely to apply the concept of partnership by estoppel. This legal principle comes into play when a party represents itself as a partner of another business, and a third party relies on that representation to their detriment. In terms of liability to Delivery Transport Inc., the court is most likely to treat Bayside Marina and Canoes Kayaks as a partnership by estoppel because Delivery Transport relied on the reputation of Bayside Marina when contracting with Canoes Kayaks, and since the two companies presented themselves as closely related or as one, they may both be held liable for the debts incurred.

User Christian Pekeler
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