Exam 31: Operation and Dissolution of General Partnerships

a.What is the liability of the partners for contracts regarding partnership business? b.What is the liability of the partnership for torts committed by a partner while acting in the ordinary course of partnership business? How does this compare to the liability of a principal under respondeat superior ? Explain.

A person admitted into an existing partnership is personally liable for all of the obligations of the partnership arising before his admission.

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

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?

Powell falsely tells Dunagan that she is a member of the partnership of Morgan and Stiles.Dunagan mentions this information to Trammell, who in reliance sells equipment on credit to Morgan and Stiles.Trammell can hold Powell liable for the misrepresentation.

The UPA marshaling of assets doctrine is expanded by the RUPA.

"Dissolution" of a partnership and "termination" of a partnership are synonymous.

The UPA provides that partners are __________ liable on all debts and contract obligations of the partnership.

General Widget's partnership assets amount to $34,000 after liquidation.Frank, Gene, and Hank, equal partners, each contributed $3,000 into the capital pool at the inception of the business.Gene later loaned the business $5,000.The partnership owes $23,000 to creditors for inventory.Under the UPA, what will Gene get in distribution, assuming there is no agreement on the distribution of profits?

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

Chuck, Betty, and Bert form CB&B Partnership to run a specialty grocery store.Bert is the day-to-day manager of the store, Betty buys the groceries, and Chuck does all the administrative work.Betty decides she would like a new car to use when calling on prospective wholesalers.She makes a contract with Big Ben Motors in the name of CB&B without consulting Chuck and Bert.CB&B and the individual partners are:

A partner is criminally liable for the crimes of her partners.

The actual express authority of partners must be specifically set forth in the partnership agreement.

Under the RUPA, a partner in a term partnership who wrongfully dissociates before the end of a definite term cannot receive payment of a portion of the buyout price before the expiration of the term.

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.

Upon dissolution, a partner still has authority to complete existing contracts.

Smarth, King, and Finkel have been partners for years, but a court of equity is now segregating and considering separately the assets and liabilities of the partnership and the respective assets and liabilities of the individual partners.This process is called:

Under the RUPA, dissolution occurs automatically upon the happening of an event specified in the partnership agreement as resulting in dissolution.The partners may not agree to continue the business.

A person has notice of a fact if the person has reason to know it exists from all of the facts known to the person at the time in question.

Does a new partner in a firm have personal liability for debts existing when he joined the firm? What should a prospective partner do to avoid unreasonable liability?