Foreign Affairs of Partnership

Question 1

Contract Liability- Express Authority

Answer 1

• might come from the partnership agreement
• might file a statement of authority
• partners could simply vote for authorization

Question 2

K Liability- implied authority

Answer 2

-exists based on a partner’s reasonable belief that an action is necessary to carry out express authority

(reasonable belief? business custom? pattern of prior practice? necessary to accomplish explicit goals?)

Question 3

K Liability- Apparent Authority

Answer 3

• partnership may be bound based on the partner acting in the ordinary course of dealings
• communicated between the partnership and the third party

Question 4

Tort Liability

Answer 4

-a partnership is liable for torts committed by partners acting within the scope of their partnership

Question 5

Consequences of Flow Liability

Answer 5

• partners are personally liable for the debts or obligations of the partnership
• a partner is joint and severally liable for all partnership obligations (go after any partner for entire sum)
• incoming partner is not personally liable for obligations incurred before becoming a partner (liable for his capital contribution)
• outgoing partner remains personally liable for obligations incurred before withdrawal and can also be liable for some partnership obligations after withdrawal