Authority of Managers and Owners

Question 1

A partner binds both the partnership and the other partners if he or she acts with Actual authority (expressed or implied); or

Answer 1

Actual authority (expressed or implied); or
Apparent authority, which cannot exist where:
The third party knows of a partner’s lack of authority, or
The partner’s action is one that requires unanimity, such as an agreement to admit a new partner.

Question 2

Tort Liability

Answer 2

Intentional torts—A partnership is usually liable if a partner commits an intentional tort while trying to advance partnership interests, even if he or she does so in a wrongful way.
Misapplication of funds—The Revised Uniform Partnership Act (RUPA) imposes virtually strict liability on a partnership for the misapplication of money received by the partnership “in the course of its business.” Between the innocent partners who had nothing to do with the misapplication and the innocent customer or client of the partnership, RUPA provides that the innocent customer or client deserves the most protection.
Joint and several liability—Under RUPA, contract and tort liability are typically joint and several, meaning that a creditor may sue any general partner and hold that partner completely liable without suing the others. However, RUPA usually provides that the assets of the partnership must be exhausted before the partnership creditor proceeds against the individual assets of the general partners.
Late arrivers—If a general partner joins an existing partnership, he or she is personally liable for all subsequently-incurred debts, but is liable for preexisting debts only out of his or her partnership contribution.