In a joint venture, which statement about liability is accurate?

• A. Participants are jointly and severally liable, but the participants can't bind one another to any new transactions
• B. There is no liability
• C. Only one partner is liable
• D. The venture itself bears all liability

Answer: (A)

In a joint venture, liability for the venture’s obligations falls on the participating members in a way that creditors can pursue either the group as a whole or any individual partner for the full amount. This joint and several liability protects creditors by ensuring there’s a practical path to recovery. At the same time, partners act as the venture’s agents; they can bind the venture to new transactions within the scope of the venture’s activities. That means while the venture incurs and can be held responsible for obligations, the partners themselves aren’t personally binding one another to unrelated new commitments outside the venture’s authority. So, the statement describes the standard arrangement: there is joint and several liability for the venture’s debts, and the binding power lies with the venture through its authorized actions rather than creating direct personal obligations between partners for each new deal. This aligns with why this choice is correct.