Question 1

Actual authority terminates upon:

Accepted Answer

A) illness of one of the partners. 
B) dissolution of the partnership. 
C) physical destruction of partnership papers. 
D) All of these. 
A) illness of one of the partners. 
B) dissolution of the partnership. 
C) physical destruction of partnership papers. 
D) All of these. B

Question 2

Jane, Kelly, and Lois are partners in an accounting firm, but Jane intends to retire and withdraw from the partnership at the end of the year.Under the RUPA, Jane is liable to the firm's creditors:

Accepted Answer

A) for a partnership obligation incurred within two years after her dissociation if at the time of entering into the transaction the other party reasonably believed Jane was then a partner, did not have notice of Jane's dissociation, and is not deemed to have had constructive notice of the dissociation. 
B) only for all debts incurred prior to her retirement. 
C) until the day of her retirement when she will be absolved of all liability. 
D) for an amount not to exceed her partnership interest on the day of her retirement. 
A) for a partnership obligation incurred within two years after her dissociation if at the time of entering into the transaction the other party reasonably believed Jane was then a partner, did not have notice of Jane's dissociation, and is not deemed to have had constructive notice of the dissociation. 
B) only for all debts incurred prior to her retirement. 
C) until the day of her retirement when she will be absolved of all liability. 
D) for an amount not to exceed her partnership interest on the day of her retirement. A

Question 3

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?

Accepted Answer

A) Only David 
B) Only the other partners 
C) Tri-State Express Mail Partnership or any partner 
D) Only Tri-State Express Mail Partnership 
A) Only David 
B) Only the other partners 
C) Tri-State Express Mail Partnership or any partner 
D) Only Tri-State Express Mail Partnership C

Question 4

The doctrine of marshaling of assets is an equitable doctrine.

Accepted Answer

A) True 
 B)False

Question 5

Under the UPA, upon dissolution of a partnership, apparent authority terminates although actual authority generally continues.

Accepted Answer

A) True 
 B)False

Question 6

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:

Accepted Answer

A) bound by Bob's actual implied authority to buy a car. 
B) bound by Bob's apparent authority to buy a car. 
C) bound by Bob's ostensible authority to buy a car. 
D) not bound because buying a car is outside the scope of the partnership business. 
A) bound by Bob's actual implied authority to buy a car. 
B) bound by Bob's apparent authority to buy a car. 
C) bound by Bob's ostensible authority to buy a car. 
D) not bound because buying a car is outside the scope of the partnership business.

Question 7

A partner's liability for partnership debts is limited to his capital contribution.

Accepted Answer

A) True 
 B)False

Question 8

The process of liquidation of a partnership is also known as "winding up."

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Under the RUPA, a partner who does not have actual authority from all of the partners may still bind the partnership by:

Accepted Answer

A) executing a contract of suretyship in the partnership name. 
B) selling partnership property which is not held for sale in the usual course of business. 
C) paying an individual partner's debts out of partnership assets. 
D) None of these. 
A) executing a contract of suretyship in the partnership name. 
B) selling partnership property which is not held for sale in the usual course of business. 
C) paying an individual partner's debts out of partnership assets. 
D) None of these.

Question 11

A partner has the partnership.

Accepted Answer

A) actual implied 
B) apparent 
C) no d. ostensible
Authority to hire and fire employees whose services are necessary to carry on the business of 
A) actual implied 
B) apparent 
C) no d. ostensible
Authority to hire and fire employees whose services are necessary to carry on the business of

Question 12

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.

Accepted Answer

A) True 
 B)False

Question 13

Under the UPA, if a partner makes a loan to the partnership, he will be in the same position as other creditors who are not partners in requesting repayment upon dissolution.

Accepted Answer

A) True 
 B)False

Question 14

Under the RUPA, if a partner is dissociated from a partnership without resulting in dissolution, the business may
choose whether to purchase the dissociated partner's interest in the partnership.

Accepted Answer

A) True 
 B)False

Question 15

Paul is driving a truck delivering goods for his partnership when he negligently backs into a customer's new car.The customer sues the partnership and recovers $6,000 in damages.What liability do the other partners have for Paul's actions?

Accepted Answer

A) No liability 
B) Liability based on their capital contributions 
C) Individual liability but not joint liability 
D) Joint and several liability 
A) No liability 
B) Liability based on their capital contributions 
C) Individual liability but not joint liability 
D) Joint and several liability

Question 16

Under the RUPA, a partner's duty not to compete terminates upon dissociation, and the dissociated partner may
immediately engage in a competitive business without further consent.

Accepted Answer

A) True 
 B)False

Question 17

In a partnership of A, B, and C, A commits fraud which creates a $9,000 liability to the partnership.If the three partners share profits and losses equally, A's liability to the partnership for his fraudulent act is $3,000.

Accepted Answer

A) True 
 B)False

Question 18

Under the UPA, dissolution by operation of law occurs:

Accepted Answer

A) if a partner has been adjudicated mentally incompetent. 
B) upon the bankruptcy of a partner. 
C) when a partner has engaged in conduct prejudicial to the business. 
D) when the business can be carried on only at a loss. 
A) if a partner has been adjudicated mentally incompetent. 
B) upon the bankruptcy of a partner. 
C) when a partner has engaged in conduct prejudicial to the business. 
D) when the business can be carried on only at a loss.

Question 19

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.

Accepted Answer

A partnership is dissolved by operation

Question 20

The RUPA provides that partners are liable on all contract obligations of the partnership.

Accepted Answer

A) jointly and severally 
B) strictly 
C) not 
D) partially 
A) jointly and severally 
B) strictly 
C) not 
D) partially

Exam 31: Operation and Dissolution of General Partnerships

Actual authority terminates upon:

Jane, Kelly, and Lois are partners in an accounting firm, but Jane intends to retire and withdraw from the partnership at the end of the year.Under the RUPA, Jane is liable to the firm's creditors:

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?

The doctrine of marshaling of assets is an equitable doctrine.

Under the UPA, upon dissolution of a partnership, apparent authority terminates although actual authority generally continues.

A partner's liability for partnership debts is limited to his capital contribution.

The process of liquidation of a partnership is also known as "winding up."

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

Under the RUPA, a partner who does not have actual authority from all of the partners may still bind the partnership by:

A partner has the partnership.

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.

Under the UPA, if a partner makes a loan to the partnership, he will be in the same position as other creditors who are not partners in requesting repayment upon dissolution.

Under the RUPA, if a partner is dissociated from a partnership without resulting in dissolution, the business may choose whether to purchase the dissociated partner's interest in the partnership.

Paul is driving a truck delivering goods for his partnership when he negligently backs into a customer's new car.The customer sues the partnership and recovers $6,000 in damages.What liability do the other partners have for Paul's actions?

Under the RUPA, a partner's duty not to compete terminates upon dissociation, and the dissociated partner may immediately engage in a competitive business without further consent.

In a partnership of A, B, and C, A commits fraud which creates a $9,000 liability to the partnership.If the three partners share profits and losses equally, A's liability to the partnership for his fraudulent act is $3,000.

Under the UPA, dissolution by operation of law occurs:

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.

The RUPA provides that partners are liable on all contract obligations of the partnership.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

51: The Legal Environment Of Business

52: Contracts.

53: Agency.

54: Sales

55: Negotiable Instruments

56: Unincorporated Business Association

57: Corporations

58: Debtor and Creditor Relation

59: Regulation of Business

60: Property.

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