Relationship with third parties Flashcards
When can a partner bind the P?
when they act with actual or apparent authority
What are the two types of actual authority?
express or implied
When can actual express authority occur?
- arise from PA
- authorization of partners
- statement of authority filed with state
When is there implied actual authority?
based on a partner’s reasonable belief that an action is necessary to carry out his express authority
When does a partner act with apparent authority?
- a partner must perform the unauthorized act in the ordinary course of P business
- the 3rd party with whom the partner was dealing cannot hold the P liable if the third party new or was notified that the partner lacked authority
When P property is held in P’s name, when does a partner have authority to transfer title?
a partner has the authority to execute an instrument of transfer in the P’s name
When P is held in a partner’s name, when can a partner transfer title?
when a partner has authority to execute an instrument of transfor in or more partner’s names
Can P recover property transferred without authority?
yes, if the P interest was indicated in the transfer instrument through which the P acquired the property or if the transderee was aware that the property belonged to the P and that the partner executed the transfer without authority
A person who owns all partners’ interests in the P effectively has title to all P partner and
has the pwer to transfer title to himself
When is P liable for partners tortious acts?
Only if the tort was committed in the ordinary course of the P business or with P authority
As for liability to third parties
what are the obligations of P and partners?
P - subject to suit for obligations
Partners - jointly and severally liable for all P obligations
How is a judgment satisfied?
first from P’s assets and then partner’s personal assets
Can a P be convicted of a crime?
Yes, penalty is levied on P assets not partners
