Governance of Partnerships

Question 1

National Biscuit Co. v. Stroud (NC 1959)

Answer 1

Facts: p-ship b/t 2 ppl, Stroud says he isn’t responsible for bread, Freeman requests bread for 2 weeks.
Issue: Is Stroud liable for payment owed to National Biscuit?
Hold: Yes. 1 p/n alone can’t change course of business
Rule: We need to rely on will of majority. If only 2 p/n, absent an alternative p-ship agmt, need both to agree Reasoning: If p/n could opt out, creditors would need all p/n to agree to pay debts, no biz would be transacted Efficient? Yes, anything else would be extremely inefficient.

Question 2

UPA § 9. (1) Partner Agent of Partnership as to Partnership Business

Answer 2

§ 9. Partner Agent of Partnership as to Partnership Business
(1) Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority.

Question 3

UPA § 9. (2) Partner Agent of Partnership as to Partnership Business

Answer 3

(2) An act of a partner which is not apparently for the carrying
on of the business of the partnership in the usual way does not bind the partnership unless authorized by the other partners.

Question 4

UPA § 18. (e) Partners Rights

Answer 4

All partners have equal rights in the management and conduct of the partnership business.

Question 5

UPA § 18. (h) Differences regarding ordinary matters

Answer 5

Any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners; but no act in contravention of any agreement between the partners may be done rightfully without the consent of all the partners.