Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)  for a partnership obligation incurred within two years after dissociation if the partnership did not dissolve and if at the time of entering into the transaction the other party reasonably believed Jane was then a partner. 
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. 
E)  for an amount not to exceed her initial capital contribution to the partnership. 
A)  for a partnership obligation incurred within two years after dissociation if the partnership did not dissolve and if at the time of entering into the transaction the other party reasonably believed Jane was then a partner. 
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. 
E)  for an amount not to exceed her initial capital contribution to the partnership.

Question 3

A partner may bind the partnership by her act if she has:

Accepted Answer

A)  actual authority, express or implied, to perform the act. 
B)  apparent authority to perform the act. 
C)  Both answers are correct. 
D)  None of these. 
A)  actual authority, express or implied, to perform the act. 
B)  apparent authority to perform the act. 
C)  Both answers are correct. 
D)  None of these.

Question 4

David, a partner in the Speedy 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)  Speedy Delivery Partnership. 
D)  Any partner. 
E)  Both Speedy Delivery Partnership and any partner. 
A)  Only David. 
B)  Only the other partners. 
C)  Speedy Delivery Partnership. 
D)  Any partner. 
E)  Both Speedy Delivery Partnership and any partner.

Question 5

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?

Accepted Answer

No, only his capital contribut

Question 6

David, Ed, and Fred are partners in the DEF partnership. The partnership is being dissolved, having $200,000 in assets and owing $410,000 to creditors. David contributed $100,000 in capital; Ed contributed $50,000 in capital; and Fred contributed $25,000 in capital. Profits are shared equally. Which of the following is correct with regard to the responsibility of each partner?

Accepted Answer

A)  The partners will bear losses equally. 
B)  The partners will bear losses in the proportion of their relative capital contributions. 
C)  If Ed refuses to contribute to covering the loss and he is out of the jurisdiction, David and Fred must contribute the additional amount necessary to pay DEF's liabilities in the relative proportion of their capital contributions. 
D)  Any of these could be true, depending on the partnership agreement. 
A)  The partners will bear losses equally. 
B)  The partners will bear losses in the proportion of their relative capital contributions. 
C)  If Ed refuses to contribute to covering the loss and he is out of the jurisdiction, David and Fred must contribute the additional amount necessary to pay DEF's liabilities in the relative proportion of their capital contributions. 
D)  Any of these could be true, depending on the partnership agreement.

Question 7

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:

Accepted Answer

A)  dissolution. 
B)  marshaling assets. 
C)  reformation. 
D)  winding up. 
A)  dissolution. 
B)  marshaling assets. 
C)  reformation. 
D)  winding up.

Question 8

Under the RUPA, a judgment creditor of a partnership may first attempt to enforce a judgment against either the separate assets of a partner or the partnership itself.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is NOT considered to be dissolution by operation of law under the UPA?

Accepted Answer

A)  Bankruptcy of a partner. 
B)  Expulsion of a partner according to the partnership agreement. 
C)  Subsequent illegality of the partnership. 
D)  Death of a partner. 
A)  Bankruptcy of a partner. 
B)  Expulsion of a partner according to the partnership agreement. 
C)  Subsequent illegality of the partnership. 
D)  Death of a partner.

Question 10

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.

Accepted Answer

a. Under the UPA, partners are jointly l

Question 11

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?

Accepted Answer

A)  ABC Partnership is not bound to hire her. 
B)  ABC Partnership is bound to pay her for 40 hours per week. 
C)  Alan is bound to pay her for 20 hours per week. 
D)  Alan has to pay her for 40 hours per week. 
A)  ABC Partnership is not bound to hire her. 
B)  ABC Partnership is bound to pay her for 40 hours per week. 
C)  Alan is bound to pay her for 20 hours per week. 
D)  Alan has to pay her for 40 hours per week.

Question 12

Carolee, Joanna, and Ellen form Capital City Partnership. Carolee contributes expertise; Joanna, $15,000; and Ellen, $20,000. After a year, Joanna adds $12,000 as a loan. Ten years later, Capital owes $44,000 to creditors, total assets are $112,000, and the partners decide to dissolve the business. How will the assets be distributed under the UPA, and what will each partner receive?

Accepted Answer

First, creditors will receive their $44,

Question 13

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.

Accepted Answer

A) True 
 B)False

Question 14

Much of the law of partnership is the law of agency.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)  jointly 
B)  strictly 
C)  jointly and severally 
D)  partially 
A)  jointly 
B)  strictly 
C)  jointly and severally 
D)  partially

Question 16

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.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Under the UPA, submission of a partnership claim to arbitration requires the consent of all the partners.

Accepted Answer

A) True 
 B)False

Question 19

Austin withdraws from a partnership and the remaining three partners decide to continue in business. Discuss the effect of the withdrawal on the partnership and on creditors rights under the UPA.

Accepted Answer

Any change in membership dissolves a par

Question 20

Upon dissolution of a partnership, all authority of a partner to act on behalf of the partnership terminates.

Accepted Answer

A) True 
 B)False

Exam 31: Operation and Dissolution of General Partnerships

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

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

A partner may bind the partnership by her act if she has:

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

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?

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:

Under the RUPA, a judgment creditor of a partnership may first attempt to enforce a judgment against either the separate assets of a partner or the partnership itself.

Which of the following is NOT considered to be dissolution by operation of law under the UPA?

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?

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.

Much of the law of partnership is the law of agency.

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

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.

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

Under the UPA, submission of a partnership claim to arbitration requires the consent of all the partners.

Austin withdraws from a partnership and the remaining three partners decide to continue in business. Discuss the effect of the withdrawal on the partnership and on creditors rights under the UPA.

Upon dissolution of a partnership, all authority of a partner to act on behalf of the partnership terminates.

Introduction to Law

Business Ethics

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

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

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 Wills

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