Deck 36: Partnerships: Nature, Formation, and Operation

Question 1

Which of the following may be a "person" under the Uniform Partnership Act?

A) Individuals only
B) Partnerships and individuals
C) Partnerships, individuals, and corporations
D) Partnerships, individuals, corporations, and other associations
E) Corporations only

Answer 1

D
Explanation: The UPA defines persons as "individuals, partnerships, corporations, and other associations."

Question 2

Title to property may not be put in the name of a partnership.

Answer 2

False
Explanation: The partnership may hold title to property.

Question 3

Which of the following was the result in Colette Bohatch v.Butler & Binion,the case presenting the question of whether the fiduciary relationship between law partners gives rise to a duty not to expel a partner who reports suspected overbilling by another partner?

A) That prohibiting expulsion of a partner who reports suspected overbilling is necessary to encourage compliance with rules of professional conduct.
B) That expelling a partner who reports suspected overbilling by another partner is not a tort even if the reporting partner had an ethical duty to report the violation.
C) That only if it is judicially determined that overbilling by a partner indeed occurred is a partnership prohibited from expelling a partner who reported the overbilling.
D) That expelling a partner who reports suspected overbilling by another partner is not a tort even if the reporting partner had an ethical duty to report the violation but that the reporting partner must be given at least 30 days prior to the expulsion.
E) That expelling a partner who reports suspected overbilling by another partner is not a tort even if the reporting partner had an ethical duty to report the violation but that the reporting partner must be given at least 6 months prior to the expulsion.

Answer 3

B
Explanation: The court refused to create an exception to the at-will nature of partnerships but recognized that its decision in no way obviated the ethical duties of lawyer.

Question 4

Which of the following is false regarding the treatment of a partnership as a legal entity?

A) A partnership is often considered a legal entity when it is sued or being sued.
B) State law determines whether a partnership can or cannot be named in litigation.
C) Title to property can be put in the partnership name.
D) Every partner is considered an agent of the partnership, but not every partner has a fiduciary duty with all other partners.
E) Under the doctrine of marshaling assets, partnership assets are arranged in a certain order to pay any outstanding debts.

Question 5

Which of the following was in Leoff v.S&J Land Co.,the case in the text involving a land dispute and whether a partnership existed?

A) The appellate court upheld the lower court's decision that a partnership between the parties existed because the agreement between the parties provided for the sharing of profits and losses.
B) The appellate court upheld the lower court's decision that no partnership existed because, while the parties had an agreement regarding management, no partnership agreement existed.
C) The appellate court upheld the lower court's decision that a partnership existed because the parties were involved in a type of joint venture.
D) The appellate court reversed the lower court's decision that a partnership existed because the plaintiff had never judicially admitted the existence of a partnership.
E) The appellate court reversed the lower court's decision that no partnership existed because by completing a dissociation, the defendant admitted the existence of a partnership.

Question 6

In relation to partnerships between local and multinational companies,what is meant by the term "keiretsu"?

A) A type of offshore partnership in which the strengths of outside firms is combined with those of firms in developing countries.
B) A type of industrial district in which an attempt is made to encourage foreign investment.
C) A group of businesses in which each individual business has a stake in the others.
D) A partnership with one local and one multinational company in an information and communication technology project.
E) An agreement between a local and a multinational company to equally share in profits and losses.

Question 7

No partnership is created based upon an employer sharing profits with an employee as payment for work.

Question 8

If one partner pays an entire judgment for a tort for which the partnership is liable,other partners have no legal obligation to indemnify that partner.

Question 9

How many actual people (not persons as defined by the Uniform Partnership Act)are required in order to have a partnership under the Uniform Partnership Act?

A) None
B) At least one
C) Ten or more
D) More than two and less than 75
E) Two or more and less than 100

Question 10

The implied authority of partners is determined by the partnership agreement.

Question 11

If a partner has authority to act and the partnership is bound by the act,each partner has unlimited personal liability for the obligation.

Question 12

A partner who refuses to obey the articles of partnership may be held liable for any losses that the partnership incurs.

Question 13

Which of the following is an association of two or more persons to carry on as co-owners a business for profit?

A) A joint operation
B) A combined partnership
C) A partnership
D) A joint business arrangement
E) A primary partnership

Question 14

Every partner is considered to be an agent of the partnership.

Question 15

Joint and several liability means that partners must be sued jointly.

Question 16

What is a written agreement that creates a partnership called?

A) Contract of partnership
B) Contract of agreement
C) Partnership articles
D) Articles of partnership
E) Clauses of partnership agreement

Question 17

If no partnership agreement exists,which of the following generally establishes the rules for the partnership?

A) The Federal Partnership Act
B) The Uniform Partnership Act
C) The Statutory Joint Act
D) The Partnership Unification Act
E) The Partnership Governance Act

Question 18

Unless otherwise stated in the partnership agreement,even if one partner has an unusually large proportion of management duties,each partner will have one vote in determining how the partnership is managed.

Question 19

In regard to developing countries which of the following is not true regarding offshore partnerships?

A) They combine the strengths of firms that operate in developing countries and firms that operate in countries that are foreign to the developing countries.
B) Firms in developing countries use offshore partnerships to gain international exposure.
C) Firms in developing countries use offshore partnerships to gain technological competence.
D) Foreign firms use offshore partnerships to gain the opportunity to enter developing markets.
E) Offshore partnerships are rarely used for workers because workers from offshore partnerships tend to be highly priced.

Question 20

Partnership by estoppel is not recognized pursuant to federal law.

Question 21

Unless the articles of partnership states otherwise,which of the following is true regarding the rights of partners to share in profits?

A) Distribution of profits is suspended until the partners amend the articles of partnership to address the distribution of profits.
B) Partners share in profits in proportion to the amount of capital contributed to the partnership.
C) Partners share in profits in proportion to the amount of work done for the partnership.
D) Partners share in profits in proportion to their seniority with the partnership with partners of equal seniority sharing equally in profits.
E) All partners have a right to share profits equally.

Question 22

When the articles of partnership do not address the matter,which of the following is true regarding decisions requiring unanimous agreement among the partners?

A) A decision to change some element of the partnership agreement, a decision to admit a new partner, and a decision to alter the nature of the firm's business all require unanimous agreement among the partners.
B) A decision to change some element of the partnership agreement requires unanimous agreement, but a decision to admit a new partner and a decision to alter the nature of the firm's business may be made by majority vote.
C) A decision to change some element of the partnership agreement and a decision to admit a new partner require unanimous agreement among the partners, but a decision to alter the nature of the firm's business may be made by majority vote.
D) A decision to admit a new partner and a decision to alter the nature of the firm's business require unanimous agreement among the partners, but a decision to change some element of the partnership agreement may be made by majority vote.
E) All decisions are made by majority vote and none require unanimous agreement.

Question 23

Which of the following entitles a creditor to a partner's profits?

A) A garnishment order
B) A charging order
C) A reimbursement order
D) An accounting order
E) An entitlement order

Question 24

In Japan which of the following is true regarding any fiduciary duty between partners?

A) Fiduciary duties recognized between partners in Japan is very similar to the fiduciary duties recognized in the U.S.
B) Japanese law does not recognize any fiduciary duty between partners.
C) Japanese law recognizes a fiduciary duty of obedience and loyalty between partners only if it is expressed by contractual agreement.
D) The Japanese application of obedience and loyalty in partnerships far exceeds that of the U.S.
E) The Japanese recognize a duty of loyalty between partners, which is strictly construed, but not a duty of obedience.

Question 25

Unless otherwise agreed by the partners,where are records of the partnership to be kept?

A) In a safety deposit box at the bank used by the partnership.
B) At the home of the managing partner.
C) At the location of the partnership's principal business office.
D) At the location of the partnership's first business office.
E) At the location of the partnership's latest business office.

Question 26

Which of the following is true regarding a partner's right to copy partnership records?

A) A partner has a right to copy partnership records.
B) A partner does not have a right to copy any partnership records.
C) A partner only has a right to copy partnership records that are not marked "confidential."
D) A partner only has a right to copy partnership records that are not marked "confidential" and that are not being used in litigation.
E) A partner only has a right to copy partnership records that directly impact that partner's right to profits.

Question 27

Partners own partnership property as ____,meaning that the partners own the property as a group.

A) Tenants in property
B) Joint tenants
C) Tenants in the entirety
D) Common tenants
E) Partnership tenants

Question 28

Which of the following was the result in Eric Johnson & Lori Johnson v.St.Therese Medical Center,the malpractice case in the text in which the plaintiffs sought to hold individual partners liable under state law for a judgment obtained only against the partnership?

A) That the plaintiffs could recover from all partners individually based on a judgment against the partnership.
B) That the plaintiffs could recover from all partners individually because, while the judgment was only against the partnership, all partners were sued individually and served with a copy of the complaint.
C) That the plaintiffs could recover from all partners individually because, regardless of whether all partners were served, the managing partner was sued and served with a copy of the complaint.
D) That the plaintiffs could not recover from all partners individually because under partnership law, partners are not individually liable for debts of the partnership.
E) That the plaintiffs could not recover from the individual partners because based on the lack of suit and judgment against them, they lacked notice that they were to be held individually liable.

Question 29

When the articles of partnership do not address the matter,which of the following is true regarding a partner's right to sell a partnership interest to a creditor?

A) A partner can sell his or her interest in a partnership to a creditor.
B) A partner cannot sell any of his or her interest in a partnership to a creditor.
C) A partner can sell only up to 75% of his or her interest in a partnership to a creditor.
D) A partner can sell only up to 50% of his or her interest in a partnership to a creditor.
E) A partner can sell only up to 25% of his or her interest in a partnership to a creditor.

Question 30

Unless otherwise agreed in the articles of partnership,which of the following is true regarding rights partners have in regard to their interactions with other partners?

A) Partners have the right to participate equally in management, the right to share equally in profits, the obligation to share equally in losses, and the right to additional compensation for devoting time to the business.
B) The right to participate in management according to the level of capital contribution, the right to share in profits according to the level of capital contribution, the obligation to share in losses according to the level of capital contribution, and the right to additional compensation for devoting time to the business.
C) The right to participate in management according to the level of capital contribution, the right to share equally in profits, the obligation to share equally in losses, and the right to additional compensation for devoting time to the business.
D) The right to participate equally in management, the right to share in profits according to the level of capital contribution, the obligation to share in losses according to the level of capital contribution, but no right to additional compensation for devoting time to the business.
E) The right to participate equally in management, the right to share equally in profits, the right to share equally in losses, but no right to additional compensation for devoting time to the business.

Question 31

Which of the following is true regarding the result of the dispute in the Case Opener involving whether a joint venture between law firms was liable for the actions of a partner sanctioned for litigation misconduct?

A) That the law firms were not liable because on the basis of the independent management of the law firms involved, no joint venture actually existed.
B) That while a joint venture existed, vicarious liability could not be asserted in order to hold members of a joint venture vicariously liable for a partner's misconduct.
C) That a joint venture existed and that members could be held liable for a partner's misconduct while acting in the ordinary course of the joint venture's business.
D) That because a joint venture is defined as a multiple-purpose partnership, the participants could be held liable, but only if the misconduct stemmed from activities engaged in on behalf of the joint venture.
E) That because a joint venture is defined as a multiple-purpose LLC, the participants could not be held liable regardless of whether the misconduct stemmed from activities engaged in on behalf of the joint venture.

Question 32

Which of the following is false regarding partnership property rights?

A) Any property brought into the partnership is considered property of the partnership.
B) Any property acquired by the partnership is considered property of the partnership.
C) Any property in the name of an individual partner that was purchased with partnership funds is considered partnership property.
D) A partner may use partnership property to pay a personal debt.
E) Each partner has the right to possess partnership property.

Question 33

Which of the following is false regarding duties of partners to one another?

A) They have a duty to be loyal to one another.
B) They have a fiduciary duty to one another.
C) They should not take any kind of action that will undermine the partnership.
D) They may engage in a competing business only if the competing business does not result in significant losses to the partnership.
E) They must disclose any material facts affecting the business to one another.

Question 34

Which of the following does the duty of obedience that one partner owes to another reference?

A) The duty to obey instructions of any other partner.
B) The duty to keep other partners informed of the finances of the partnership.
C) The duty to keep other partners informed of partnership debts.
D) The duty to obey the articles of partnership.
E) The duty to reimburse the partnership for any personal expenditures.

Question 35

Which of the following is a way that a person may be held liable as a partner without actually being named as a partner in a partnership agreement?

A) Partnership by common
B) Partnership by assumption
C) Partnership by estoppel
D) Partnership by equity
E) Partnership by arrangement

Question 36

When the articles of partnership are silent,which of the following property rights do partners have?

A) The right to participate in the management of the business, the right to possess partnership property, and the right to an interest in the partnership.
B) The right to participate in the management of the business, but not the right to possess partnership property or the right to an interest in the partnership.
C) The right to participate in the management of the business and the right to possess partnership property, but not the right to an interest in the partnership.
D) The right to participate in the management of the business and the right to an interest in the partnership, but not the right to possess partnership property.
E) The right to possess partnership property and the right to an interest in the partnership; but not the right to participate in the management of the business because while the right to participate in management may exist, it is not a property right.

Question 37

Which of the following is true regarding the liability of a partner for a mistake?

A) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is not held personally liable for the mistake.
B) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is held personally liable for the mistake, but only to the extent of his or her capital contribution.
C) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is held personally liable for the mistake, but only to the extent that he or she shares in profits.
D) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is held personally liable for the mistake, but only to the extent that he or she shares in losses.
E) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is held fully personally liable for the mistake.

Question 38

Unless the articles of partnership states otherwise,which of the following is true regarding the rights of partners to share in the management of a partnership?

A) All partners have a right to participate equally in the management of the partnership.
B) Partners share in management in proportion to the amount of capital contributed to the partnership.
C) Partners share in management in proportion to the amount of work done for the partnership.
D) Partners share in management in proportion to their seniority with the partnership with partners of equal seniority sharing equally in management.
E) Rights to management are suspended until the partners amend the articles of partnership to address management rights.

Question 39

Which of the following is true regarding the right of a personal creditor of a partner to seize specific items of partnership property?

A) A creditor may do so only after giving all partners at least 90 days advance notice.
B) A creditor may do so only after giving all partners at least 60 days advance notice.
C) A creditor may do so only after giving all partners at least 30 days advance notice.
D) A creditor may seize specific items of partnership property only if the items are located in the office of the creditor involved.
E) A creditor may not seize specific items of partnership property.

Question 40

Which of the following represents a partner's right to an interest in the partnership?

A) A partner has no right to an interest in the partnership.
B) The right is composed only of the partner's share of profits.
C) The right is composed only of the partner's right to return of capital contributed by the partner.
D) The right is composed only of the partner's right to return of capital contributed by the partner and any wages due.
E) The right is composed of a combination of the partner's share of the profits and a return of capital contributed by the partner.

Question 41

Is Wally entitled to a review of all partnership assets and profit statements listing the distributions to partners?

A) Yes because partners are always entitled to an accounting.
B) Only if he can establish that one of the other partners failed to disclose a profit or benefit earned from the partnership.
C) If he can establish that a review would be just and reasonable.
D) No, because he had not been appointed the managing partner.
E) Only if he can prove probably that one of the partners committed fraud against the partnership.

Question 42

Which of the following is true regarding Sandra's statement that a written agreement is not necessary to set up a partnership?

A) She is correct.
B) She is correct but only because three or fewer members are involved.
C) She is incorrect but only because fewer than five members are involved.
D) She is correct only if all partners are considered sophisticated investors.
E) She is incorrect only if none of the partners have experience with the partnership form of business.

Question 43

Which of the following is false regarding the rights and obligations of partners?

A) Each partner can serve as an agent for the partnership.
B) As long as the partner has authority to act, each partner's act in performing business duties is binding on the partnership.
C) As long as the partner has authority to act, each partner's act in making agreements with third parties is binding on the partnership.
D) As long as one partner has authority to act and the partnership is bound by the act, each partner has unlimited personal liability for the obligation.
E) A partner cannot serve as an agent for other partners.

Question 44

What is the written agreement creating the partnership entered into by Bruce,Sandra,and Minnie called?

A) Contract of partnership
B) Contract of agreement
C) Partnership articles
D) Articles of partnership
E) Clauses of the articles of partnership

Question 45

Did Sandra commit any breach of duty to the partnership?

A) Yes, she breached her fiduciary duty to the other partners.
B) Yes, she breached her duty of integrity to the other parties.
C) Yes, but only if the other partners can show that she made more income through doing the work on her own than she would have made if she had done the work through the partnership.
D) No, but only because she held two-thirds of the voting rights and could approve the work herself.
E) No, she did not breach any duty.

Question 46

Which of the following is correct regarding Sandra's statement to the effect that she had greater management rights because she was doing a greater percentage of work for the partnership?

A) Sandra is incorrect because unless otherwise stated in the articles of partnership, all partners share equally in the management of the partnership.
B) Sandra is incorrect because unless otherwise stated in the articles of partnership, partners share in management rights in proportion to their rights to profits.
C) Sandra is incorrect because unless otherwise stated in the articles of partnership, partners share in management rights in proportion to their obligation for losses.
D) Sandra is correct only if the proportion of work she was doing was inequitable.
E) Sandra is correct only if she can establish that the other partners are guilty of mismanagement in such a significant manner that a breach of fiduciary duty has occurred.

Question 47

Which of the following is true if a partner commits a tort within the scope of his or her partnership duties?

A) All partners have common liability.
B) All partners have joint and several liability.
C) All partners are liable in accordance with the percentages used for the allocation of profits.
D) All partners are liable in accordance with the percentages used for the allocation of losses.
E) All partners are liable in accordance with the percentage of their capital contributions.

Question 48

Which of the following is true under the Uniform Partnership Act,regarding profit and partnerships?

A) There is no requirement that a partnership be formed with a profit-making motive, and all states recognize the status of non-profit partnerships.
B) A partnership must have a profit-making motive only if the partnership has five or more members.
C) There is a requirement that a partnership have a profit-making motive only if the partnership has been in existence for over one year.
D) The partners must operate the business for a profit, and the partnership must be dissolved if no profit is made for three consecutive years.
E) The partners must operate the business for a profit which is construed to mean that the partners must intend to make some kind of profit from the business.

Question 49

Which of the following is the proper reference for Wally's request to review all partnership assets and profit statements listing the distributions to partners?

A) He requested a "report."
B) He requested a "synopsis."
C) He requested an "accounting."
D) He requested a "review."
E) He requested an "overview."

Question 50

Which of the following is true under the Uniform Partnership Act regarding personal liability of partners for obligations of the partnership when the partnership itself is liable?

A) If a partnership is liable, each partner has unlimited personal liability.
B) If a partnership is liable, each partner only has personal liability in proportion to the number of partnership members.
C) If a partnership is liable, each partner only has personal liability in proportion to the way in which profits are allocated.
D) If a partnership is liable, each partner only has personal liability in proportion to the way in which losses are allocated.
E) Partners do not have personal liability for obligations of a partnership when the partnership itself is liable.

Question 51

Which of the following is false regarding the implied authority of partners?

A) Partners generally have less authority than typical agents.
B) The implied authority of partners is usually determined by the nature of the business.
C) Implied authority permits partners to enter into agreements necessary to carry on partnership business.
D) A partner has the authority to purchase goods necessary to perpetuate the business.
E) A partner does not have implied authority to sell partnership property without the consent of all other partners.

Question 52

Which of the following is correct regarding the executor's rights,if any,in Elaine's share of the property to sell at auction?

A) The executor was entitled to one-half of the partnership assets including half the partnership property.
B) The executor was not entitled to partnership property because rights in specific partnership property passed to Barry according to the right of survivorship.
C) The executor was entitled to one-half the partnership property only if Elaine was the managing partner pursuant to the articles of partnership.
D) The executor was only entitled to ½ of the partnership property not in use at the mortuary at the time of her death.
E) The executor was entitled to partnership property only if Elaine's will stated that the executor was so entitled.

Question 53

Which of the following is true regarding Barry's claim that he is entitled to compensation for closing down the mortuary?

A) He is not entitled to any compensation unless the articles of partnership specifically gave him that right.
B) He is not entitled to any compensation unless credible proof exists that Elaine acknowledged prior to her death that expenses in eventually closing down the business should be compensated.
C) He is entitled to compensation for the work only if he can establish that all outstanding debts of the mortuary have been paid.
D) He is entitled to compensation for the work only if the executor agreed that it needed to be done.
E) He is entitled to compensation for the work.

Question 54

Which of the following is correct regarding Matthew's claim to additional compensation based upon the amount of work he was doing?

A) He is correct.
B) Based upon equitable principles he may be correct, but only if he can establish that the other partners wrongfully refused to do their share of the work.
C) He is incorrect.
D) He is incorrect unless he can establish that he honestly did not know the law in regard to partnerships and did the extra work believing that he would be compensated.
E) He is incorrect unless he can establish that he did at least 30% more work than any other partner.

Question 55

Is Barry correct that he owed Elaine's estate nothing?

A) Yes, because all rights passed to him at the time of her death.
B) He is correct only if Elaine's will was silent on the matter.
C) He is correct only if he, not Elaine, was the managing partner.
D) He is incorrect because he had a duty to account to Elaine's estate for the value of Elaine's interest in specific property.
E) He is incorrect because he had a duty to give the executor half the caskets, etc. on hand when Elaine died as well as half of all accounts due.

Question 56

Which of the following is correct regarding how the partnership losses should be allocated?

A) Losses would be allocated first based on a judicial determination as to whether losses should be allocated to a partner because of poor decisions, and, if not, then equally.
B) Losses would be allocated in proportion to the amount of work done in the business, with a partner who contributed more work being allocated less in the way of losses.
C) Losses would be allocated in proportion to the right to share in management.
D) Losses would be allocated equally.
E) Losses would be allocated in proportion to the capital contribution, with partners who contributed more capital being allocated less in the way of losses.

Question 57

Which of the following is true regarding the duty of care,if any,that one partner owes to another?

A) The duty of care is not involved in the law of partnership.
B) The duty of care is owed by each partner to the partnership itself, but partners do not owe a duty of care among themselves.
C) Partners owe a duty of care among themselves, but only in regard to transactions involving over $5,000.
D) While partners owe a duty of care to each other, a partner who makes an honest mistake in fulfilling responsibilities to the partnership will not be held liable for the mistake.
E) Partners owe a duty of care to each other, and a partner is liable to other partners on a strict liability basis for any mistakes or errors made.

Question 58

Is Wally entitled to inspect the books?

A) Only if he is the managing partner.
B) Only if he can establish fraud on the part of another partner.
C) Only if the articles of partnership specifically gave him that right.
D) Only if the articles of partnership specifically gave him that right or the other partners agreed.
E) Yes.

Question 59

Which of the following is false regarding the Revised Uniform Partnership Act?

A) There is some disagreement between the Uniform Partnership Act and the Revised Uniform Partnership Act about the rules of partnership.
B) Changes in relation to the Revised Uniform Partnership Act and the Uniform Partnership Act are insignificant.
C) The Revised Uniform Partnership Act generally serves to expand the Uniform Partnership Act.
D) If adopted the Revised Uniform Partnership Act governs partnerships in the absence of an express agreement.
E) The Revised Uniform Partnership Act has been adopted in approximately half the states.

Question 60

For which of the following is false regarding when a partner may demand an accounting?

A) A partner may demand an accounting whenever the copartners wrongfully exclude a partner from the partnership or from access to the books.
B) A partner may demand an accounting whenever any partner fails to disclose a profit or benefit from the partnership.
C) A partner may demand an accounting whenever circumstances render an accounting as "just and reasonable."
D) A partner may demand an accounting for any time for any reason.
E) A partner may demand an accounting whenever the partnership agreement provides for an accounting.

Question 61

Tonya and Maurice form a partnership to sell decorative rock for landscaping purposes.They are having trouble getting customers as well as loans for inventory.Tonya falsely tells ABC bank and customers that her parents are partners in the business.Her parents find out but take no steps to provide correct information.Tonya and Maurice default on a loan to ABC Bank,and the bank sues Tonya's parents.Will the bank likely prevail,and why or why not?

Question 62

As set forth in the text,list the types of information that articles of partnership usually include.

Question 63

Set forth and describe the three property rights held by partners including rights,if any,upon death.

Question 64

Describe the liability,if any,of incoming partners.

Question 65

Ellie is a partner in a law firm.Pursuant to the partnership agreement,however,she does not have authority to make purchases for the firm.Ellie goes to ABC Office Supply and makes a purchase on the firm account.She later quits the law firm and takes the computer with her.Assuming that ABC Office Supply knew she was a partner but did not know that she lacked authority,what remedies are available to ABC and why?