Final answer:
Liability for the unauthorized loan taken by Ed, a partner in Farm Equipment Sales, will likely be imposed on Ed himself, since he acted without authorization and the bank was aware of this fact.
Step-by-step explanation:
When Ed, a partner in Farm Equipment Sales, applied for a loan at Growers Bank without the authorization of other partners, and the bank was aware of the lack of authorization, the liability in the event of default would typically fall upon Ed himself. Since Ed acted without the proper authority, and the bank knew about this, the partnership (Farm Equipment Sales) would generally not be held liable for the loan. If the loan goes into default, the bank cannot hold the partnership responsible, because they entered into the contract with the knowledge that Ed was not authorized to act on behalf of Farm Equipment Sales. Thus, liability would likely be imposed on Ed for any losses associated with the unauthorized loan.