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The parties dispute the legal effect of a contested transaction. Two founders shared profits while telling a creditor that only one founder was responsible. The record contains both written proof and disputed oral testimony. The parties disagree about the legal effect of those facts. Which answer gives the best resolution?

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The court should resolve the dispute by applying the operative rule to the material facts: The answer should identify the governing rule for Partner Authority and Liability and apply it to the operative facts. Import a rule from a nearby issue instead of applying the rule triggered by these facts. Reject the claim or defense solely because the opposing party disputes a required fact. Resolve the dispute on equitable fairness alone without identifying the governing doctrine or its limits.

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