Exam 31: Operation and Dissolution of General Partnerships

Roberts, Smith, and Tomas have been partners for ten years. The partners, however, are now collecting debts, converting assets to cash, paying creditors, and distributing remaining assets to each partner. Roberts, Smith, and Tomas are engaged in:

Dale falsely tells Glenna that he is a partner in Huntsman Appraisers. Glenna casually repeats this information to Kash, who sells office equipment on credit to Huntsman in reliance on the statement. Kash cannot hold Dale liable because he was not justified in relying on the representation made privately by Dale to Glenna, which Dale did not consent to have repeated.

A retiring partner cannot be discharged from existing liabilities of the partnership except by payment.

David, a partner in the Tri-State Express Mail delivery partnership, negligently drove his delivery truck onto the curb during a rush-hour package delivery. Marlene was injured. Against whom can Marlene collect?

A partner who does not have actual authority to order a fax machine for the partnership office probably has apparent authority to do so.

Answer the following: a. Does a new partner in a firm have unlimited liability for debts existing when he joined the firm? b. What should a prospective partner do to avoid unreasonable liability? Explain.

The UPA codified all of the common law causes of dissolution of a partnership.

Which of the following is true of dissociation?

Kline, Finkel, and Martinez have been partners for years, but a court is now dividing the assets and liabilities of the partnership separate from the assets and liabilities of the individual partners. This process is called:

Shannon has just become a partner in A & R Accounting Partnership. Her capital contribution is $10,000, which she paid from her savings. Which of the following is correct with respect to Shannon's liability for partnership obligations?

A partner has the partnership.

If a partner's act is not apparently for carrying on in the ordinary course the partnership business:

ABC Partnership agrees to hire an "errand runner" 20 hours per week for the summer. Alan, a partner, interviews a college student and decides to offer her the job. But she says she needs a 40-hour-a-week job, so Alan agrees to make it 40 hours. What result?

Answer the following: a. What is the liability of the partnership for contracts regarding partnership business? _{Under the RUPA, what is the liability of the partnership for torts committed while a partner is} b. acting in the ordinary course of partnership business? How does this compare to the liability of a principal under respondeat superior? Explain. _{Under the UPA, partners are jointly liable on all partnership debts and contracts.}

The RUPA abolishes the marshaling of assets doctrine and the dual priority rule.

Chuck, Bob, and Bert form CB&B Partnership to run a specialty grocery store. Bert is the day-to-day manager of the store, Bob buys the groceries, and Chuck does all the administrative work. Bob decides he would like a new car to drive to visit prospective wholesalers. He makes a contract with Big Ben Motors in the name of CB&B without consulting Chuck and Bert. The partnership is:

Identify the ways a partnership is dissolved by operation of law under the UPA. List the circumstances under which a court will order a dissolution of a partnership.

Under the RUPA, a partner's dissociation:

If the partnership is bound by a contract, then each general partner has unlimited personal liability for that obligation.

A person, who represents himself to third persons as being a partner, when in fact he is not, may have the liability of a partner.