The characteristic of a partnership in which partners exercise good faith, loyalty, and sound judgement best describes:

Question

Quizplus · Accepted Answer

The characteristic described reflects a fiduciary relationship, which is a legal relationship in which one party (in this case, partners in a partnership) are entrusted to act in the best interest of another party (in this case, the partnership itself and its partners). The partners owe each other a duty of good faith, loyalty, and sound judgement, forming a fiduciary relationship. Mutual agency refers to the ability of partners to bind the partnership to legal obligations, mutual distinction refers to the ability of partners to distinguish between personal and partnership assets, and a financial relationship is too broad and generic to accurately describe the identified characteristic.

The Characteristic of a Partnership in Which Partners Exercise Good