Relations to Third Parties

Question 1

Generally

Answer 1

RUPA says that each partner is an agent of the partnership. Therefore, authority of a partner to bind partnership follows agency law.

Focus is apparent authority.

Question 2

Apparent Authority

Answer 2

(1) the act of any partner,
(2) for apparently carrying on in the ordinary course of the partnership business or business of the kind carried out by the partnership,

(3) binds the partnership UNLESS
- (a) partner had no authority in the particular matter AND
- (b) the person with whom the partner was dealing with knew or had received notification that they lacked authority.

Question 3

Actual Authority

Answer 3

Partnership is bound by an act of a partner if the partner reasonably believes he has based on the communications between the partnership and partners.

Can be in the agreement or done by vote.

Question 4

Liability of Partners

Answer 4

All partners are jointly and severally liable for obligations of the partnership (whether in tort or contract).

They are personally and individually liable but can be indemnified from the partnership or ask the other partners to pay their shares.

Not liable for criminal acts unless they participate.