Exam 37: All Forms of Partnerships

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Ed, a partner in Farm Equipment Sales, applies for a loan with Growers Bank allegedly on Farm Equipment's behalf but without the authorization of the other partners. The bank knows that Ed is not authorized to take out the loan. Liability in the event of default will be imposed on

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(Multiple Choice)

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Question 1

Correct Answer:

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Sebastian was the manager of Thai Bistro, a restaurant specializing in Southeast Asian foods. Sebastian opened a bank account in Thai Bistro's name, signing the account signature card as "owner." Umeko, who was often at Thai Bistro and had free access to its office, told others that she was "an owner" and "a partner." She also opened a bank account in Thai Bistro's name, and signed the account signature card as "owner." Sebastian told Vijay, the owner of Wong Noodles, Inc., that Umeko was a member of a partnership that owned Thai Bistro. On this basis, Wong Noodles delivered its goods to Thai Bistro on credit. In fact, Thai Bistro was owned by a corporation. When the unpaid account totaled more than $10,000, Wong Noodles filed a suit against Umeko to collect. On what basis might Umeko be liable for the debt?

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(Essay)

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Question 2

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The theory under which Umeko would most likely be liable for Thai Bistro's debt to Wong Noodles is partnership by estoppel.
The first requirement of this theory is a representation, by a nonpartner or by another with the nonpartner's consent, that the nonpartner is a partner. The second requirement is reliance on that representation.
In this case, Wong Noodles could prove both elements. Both Sebastian and Umeko made representations with respect to Umeko's status in relation to Thai Bistro-they both signed bank cards as "owner," Umeko was often at Thai Bistro and had free access to its office, Umeko told others that she was a "partner" in the business, which is what Sebastian also told Vijay. As for the reliance element, Wong Noodles extended credit to Thai Bistro only because Wong Noodles believed that Thai Bistro was owned by a partnership.

A majority of the states treat a partnership as an entity for most purposes.

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(True/False)

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Question 3

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True

Brad and Carol are partners in Doctors for Children, a medical clinic. Brad's dissociation from the firm results in

(Multiple Choice)

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Question 4

Kim and Lyle are partners in K&L Sales, which exports technical equipment. If Congress declares that the equipment can no longer be exported, K&L

(Multiple Choice)

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Question 5

On a partner's dissociation, his or her right to participate in the management and conduct of the business terminates.

(True/False)

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Question 6

If no fixed duration of the partnership is specified, the partnership is a partnership at will, which means that it cannot be dissolved.

(True/False)

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Question 7

Stefani and Tyler agree in an exchange of e-mail to form a partnership to buy and sell real property. Their partnership agreement is legally binding

(Multiple Choice)

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Question 8

Withdrawal from a partnership before the end of its express term constitutes a breach of the partnership agreement.

(True/False)

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Question 9

Beth and Connie do business as Diamond Investments. In acting on the firm's behalf, Beth makes an honest error in overestimating the value of a particular stock purchase. To her firm, Beth is

(Multiple Choice)

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Question 10

In a general partnership, the acts of one partner in the ordinary course of business can subject the other partners to personal liability.

(True/False)

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Question 11

Orlando is a limited partner in Port of Call Exports, a limited partnership. By participating in the firm's management, Orlando is liable for its obligations

(Multiple Choice)

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Question 12

A third party can never sue one of the partners of a partnership without suing all members of the partnership.

(True/False)

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Question 13

A limited partnership cannot be dissolved by court decree.

(True/False)

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Question 14

Kay and Linda decide to do business as Marketing & Promotion. To be a partnership, this association can result from an agreement that is

(Multiple Choice)

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Question 15

Nell is considering forms of business organization for Optic Center, a medical eye clinic. An advantage of a limited liability partnership is that, depending on the applicable state statute, partners can avoid personal liability for

(Multiple Choice)

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Question 16

In winding up a general partnership, creditors are paid before partners receive their capital contributions.

(True/False)

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Question 17

Rita and Salvatore do business as Tech Fixers, a partnership. In most states, for the purposes of collecting judgments and having accounting performed, this firm would be treated as

(Multiple Choice)

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Question 18

Unlike most agents, each partner in a partnership has an ownership interest in the business.

(True/False)

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Question 19

Fact Pattern 37-2 Kristin and Lindsey are partners in Mobile Devise, an online marketing firm. -Refer to Fact Pattern 37-2. Lindsey dissociates from Mobile. Kristin signs a contract with Organic Olives, a food seller, apparently on Mobile's behalf. Organic Olives does not know of Lindsey's dissociation. The contract is binding on

(Multiple Choice)

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Question 20

Showing 1 - 20 of 72

Exam 37: All Forms of Partnerships

Ed, a partner in Farm Equipment Sales, applies for a loan with Growers Bank allegedly on Farm Equipment's behalf but without the authorization of the other partners. The bank knows that Ed is not authorized to take out the loan. Liability in the event of default will be imposed on

A majority of the states treat a partnership as an entity for most purposes.

Brad and Carol are partners in Doctors for Children, a medical clinic. Brad's dissociation from the firm results in

Kim and Lyle are partners in K&L Sales, which exports technical equipment. If Congress declares that the equipment can no longer be exported, K&L

On a partner's dissociation, his or her right to participate in the management and conduct of the business terminates.

If no fixed duration of the partnership is specified, the partnership is a partnership at will, which means that it cannot be dissolved.

Stefani and Tyler agree in an exchange of e-mail to form a partnership to buy and sell real property. Their partnership agreement is legally binding

Withdrawal from a partnership before the end of its express term constitutes a breach of the partnership agreement.

Beth and Connie do business as Diamond Investments. In acting on the firm's behalf, Beth makes an honest error in overestimating the value of a particular stock purchase. To her firm, Beth is

In a general partnership, the acts of one partner in the ordinary course of business can subject the other partners to personal liability.

Orlando is a limited partner in Port of Call Exports, a limited partnership. By participating in the firm's management, Orlando is liable for its obligations

A third party can never sue one of the partners of a partnership without suing all members of the partnership.

A limited partnership cannot be dissolved by court decree.

Kay and Linda decide to do business as Marketing & Promotion. To be a partnership, this association can result from an agreement that is

Nell is considering forms of business organization for Optic Center, a medical eye clinic. An advantage of a limited liability partnership is that, depending on the applicable state statute, partners can avoid personal liability for

In winding up a general partnership, creditors are paid before partners receive their capital contributions.

Rita and Salvatore do business as Tech Fixers, a partnership. In most states, for the purposes of collecting judgments and having accounting performed, this firm would be treated as

Unlike most agents, each partner in a partnership has an ownership interest in the business.

Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Business and the Constitution

Business Ethics

Tort Law

Strict Liability and Product Liability

Intellectual Property Rights

Internet Law, Social Media, and Privacy

Criminal Law and Cyber Crime

Nature and Terminology

Agreement in Traditional and E-Contracts

Consideration

Capacity and Legality

Mistakes, Fraud, and Voluntary Consent

The Writing Requirement in Our Digital World

Third Party Rights

Performance and Discharge

Breach of Contract and Remedies

The Formation of Sales and Lease Contracts

Title, Risk, and Insurable Interest

Performance and Breach of Sales and Lease Contracts

Warranties

International and Space Law

Negotiable Instruments

Transferability and Holder in Due Course

Liability, Defenses, and Discharge

Banking in the Digital Age

Creditors Rights and Remedies

Secured Transactions

Bankruptcy Law

Agency Formation and Duties

Agency Liability and Termination

Employment, Immigration, and Labor Law

Employment Discrimination

Small Businesses and Franchises

Limited Liability Companies and Special Business Forms

Corporate Formation and Financing

Corporate Directors, Officers, and Shareholders

Mergers and Takeovers

Investor Protection, Insider Trading, and Corporate Governance

Administrative Agencies

Consumer Law

Environmental Protection

Antitrust Law

Professional Liability and Accountability

Personal Property and Bailments

Real Property and Landlord-Tenant Law

Insurance

Wills and Trusts

The Legal Environment of Business

Torts and Crimes

Contracts and E-Contracts

Domestic and International Sales and Lease Contracts

Negotiable Instruments

Creditors Rights and Bankruptcy

Agency and Employment

Business Organizations

Government Regulation

Property and Its Protection

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