A third person should recognize that a partner has limited or no authority if:

Question

Quizplus · Accepted Answer

All three scenarios indicate that the partner has limited or no authority. In scenario A, the partner is attempting to act on behalf of the partnership in a matter that is outside of the usual business, indicating that they may not have authority to make such decisions. In scenario B, the third person knows that the partnership has been terminated, indicating that the partner does not have the authority to act on behalf of a non-existent entity. In scenario C, the partner is attempting to pay a personal obligation using the name of the firm, which is not a legitimate business purpose and indicates that the partner may not have the authority to make financial decisions on behalf of the partnership.

A Third Person Should Recognize That a Partner Has Limited