Scott and Clark spend $50,000 each to form a law partnership. On the first day, someone trips over a potted plant in their lobby and sues them for $400,000. Which of the following is true?

Question

Quizplus · Accepted Answer

In a general partnership, all partners are jointly and severally liable for the partnership’s debts and obligations, including lawsuits. This means that if a judgment of $400,000 is passed against the partnership, each partner is individually responsible for the full amount, regardless of their ownership percentage. If one partner cannot pay their share, the other partner(s) are responsible for covering their portion. Therefore, if Clark cannot afford to pay any of it, Scott will be liable for the entire $400,000. Option A is not correct because each partner is responsible for the full amount. Option C is incorrect because ownership percentage does not affect individual liability in a general partnership. Option D is not true because each partner is responsible for the full amount. Option E is also not correct because the partnership is liable, not just the individual partner who put the plant.

Scott and Clark Spend $50,000 Each to Form a Law