Where a partner who erroneously believed she was a limited partner dealt with a third party who believed in good faith that she was a general partner,the partner will be treated as a general partner.

Question

Quizplus · Accepted Answer

This is known as the "doctrine of apparent authority" and it applies when a third party has a reasonable belief that a partner has authority to act as a general partner, even if that belief is based on a misunderstanding of the partnership agreement. In this case, the partner will be treated as a general partner and may be held liable for the actions of the partnership.

Where a Partner Who Erroneously Believed She Was a Limited