Question 1

Kyle,Pedro,and Madeline form a partnership.There is no agreement as to the duration of the partnership.The partnership is a partnership at will.

Accepted Answer

The statement mentions that there is no agreement as to the duration of the partnership, which indicates that it is a partnership at will.

Question 2

Without the approval of the other partners,a partner cannot sell his or her share.

Accepted Answer

In a partnership, the sale of a partner's share typically requires the consent of the other partners, as partnerships are based on mutual agreement and trust.

Question 3

Alicia and Ted have a written agreement wherein they will share the losses of their joint business.This agreement is strong evidence they are partners.

Accepted Answer

Sharing the losses of a joint business is one of the key characteristics of a partnership, as partners are jointly liable for the debts and obligations of the business. Therefore, the fact that Alicia and Ted have a written agreement to share these losses is strong evidence that they are partners in the business.

Question 4

Lily is involved in the winding up of her partnership.Lily is NOT entitled to compensation for her work since she is a partner.

Accepted Answer

Partners may be entitled to compensation for winding up the partnership if the partnership agreement or applicable laws provide for it.

Question 5

Which statement about the financial rights of partners is accurate?

Accepted Answer

Partners typically share profits equally unless there is an agreement that specifies a different arrangement. This is a fundamental principle of partnerships, allowing for flexibility in how profits are distributed among partners based on their agreement.

Question 6

Nicholas and Holly are partners in a toymaking shop.If Rudolph obtains a judgment against Nicholas for injuring Rudolph while Nicholas was on partnership business,Rudolph must try to collect from the partnership before going after Nicholas's personal assets.

Accepted Answer

In a general partnership, partners are jointly and severally liable for partnership obligations. This means that Rudolph can first try to collect from the partnership assets before going after Nicholas's personal assets. However, if the partnership assets are insufficient to satisfy the judgment, Rudolph can then pursue Nicholas's personal assets to collect the remaining amount owed.

Question 7

Which of the following events occurs first with respect to the ending of a partnership?

Accepted Answer

Dissolution is the first event in ending a partnership. It refers to the legal process of ending a partnership, which may occur due to various reasons such as expiry of the partnership agreement, death or bankruptcy of a partner, or mutual agreement among the partners. After dissolution, the partnership enters the winding up phase where the assets are collected, debts are paid off, and any remaining proceeds are distributed among the partners. Therefore, options A, B, and D occur after dissolution.

Question 8

A partnership is liable for both the negligent and intentional acts of a partner if the acts were committed within the ordinary course of the partnership's business.

Accepted Answer

This is true under the principle of vicarious liability, which makes the partnership responsible for the acts of its partners within the scope of their authority and the ordinary course of business.

Question 9

The dissolution of a partnership means the same as its termination.

Accepted Answer

The dissolution of a partnership refers to the process of ending the legal relationship between the partners according to the terms of the partnership agreement or law, but it does not necessarily mean the business ceases operations. Termination, on the other hand, means the complete winding up of the business activities and the cessation of its operations.

Question 10

Brock and Heidi agree to jointly run a fundraiser for the nonprofit children's hospital.Even if they don't have a formal,written agreement,they have formed a partnership.

Accepted Answer

The answer of Brock and Heidi agree to jointly run...

Question 11

In Banker v.Estate of Banker the court held that

Accepted Answer

In Banker v. Estate of Banker, the court held that when there is no proof of an agreement, a partner cannot receive compensation for work done. This means that without a written or verbal agreement stating otherwise, partners in a partnership are not entitled to compensation for work done.

Question 12

The rules set out in the UPA defining the liability of partners to outsiders can be modified by the partnership agreement.

Accepted Answer

The answer of The rules set out in the UPA...

Question 13

Elion was a partner in a partnership.Elion's death would be considered a wrongful dissociation.

Accepted Answer

Elion's death would not be considered a wrongful dissociation because death is a natural and legally recognized event that leads to the automatic dissociation of a partner from a partnership, not a breach of the partnership agreement or wrongful conduct.

Question 14

All of the following conditions must exist for partnership by estoppel to exist EXCEPT

Accepted Answer

For partnership by estoppel to exist, participants must hold themselves out as partners, a third party must believe and rely upon that assertion, and the third party must suffer harm as a result. The agreement to share in the profits is a necessary element of a partnership, so if one partner agrees not to share in the profits, partnership by estoppel cannot exist.

Question 15

Jeremiah was a partner in a partnership,but he quit unexpectedly when he got his feelings hurt over an internal decision.Dissociation has occurred.

Accepted Answer

Jeremiah quitting the partnership and dissociating from it means that he has separated himself from the business, and therefore dissociation has occurred.

Question 16

Common law plays an important role in regulating partnerships.

Accepted Answer

Common law principles, such as those related to agency, fiduciary duties, and contract law, are often used in partnership disputes and governance.

Question 17

A partner always has the right,though not the power,to leave a partnership.

Accepted Answer

The answer of A partner always has the right,though not...

Question 18

Doyle contributed $10,000 when he became a general partner in the existing partnership of R & Z Heating.If Albert wins a judgment for $25,000 against R & Z on a claim that was incurred before Doyle became a partner,Doyle shares joint and several liability with his new partners for the whole obligation.

Accepted Answer

Doyle is not liable for obligations incurred by the partnership before he became a partner, unless he agrees to assume such liabilities.

Question 19

In determining if a partnership exists,the courts will consider all of the following factors EXCEPT

Accepted Answer

The nature of the business is not a determining factor in establishing whether a partnership exists. Courts look at how the business is managed, the actions of the individuals involved, and the arrangement for sharing profits, among other factors, to determine if a partnership exists.

Question 20

A partnership can only be held liable for the partners' authorized acts.

Accepted Answer

A partnership can be held liable for both the authorized and unauthorized acts of its partners, as long as they are done within the scope of the partnership's business or apparent authority. This means that each partner has the ability to legally bind the partnership, which can result in joint and several liability for all partners.

Quiz 32: Partnerships