PA, Capacity & Relationship between Partners & Outsiders

_____ is an authority which have been mentioned either in the partnership agreement or orally or from the conduct of the parties.

• Apparent authority

• Actual authority

• Supreme authority

• Ostensible authority

Every partner is an agent for the partnership and other partners.

• True

• False

A partner is not bound by the act of the other partner if he acted within his authority / ordinary course of the business

• True

• False

Ordinary Course of the business include all the followings except:

• employment of staff

• borrowing money

• contracting debts and paying it back

• the purchasing of business building for personal purposes

A customer of a partnership who knows that the person has no authority to act as the partners but allowed the dealing, he then can sue the partnership .

• True

• False

______ liability means every partner in a firm is liable jointly with the other partners for all debts and obligations of the firm incurred while he is a partner.

All the partners of an accounting firm would be liable if any one of them has been negligent in the handling of accounts for their client. Similarly, a firm of lawyers would be liable for the negligence of one of the partners. This is an example of ______ liability

• criminal liability

• tort liability

• contractual liability

What is the liability of other partner if partnership has been dealing with imitation goods (fake product) called Levo's instead of Levi's but it was handling by only 1 partner.

• All partners are liable.

• A partner who committed the act is personally liable.

In relation to the misuse of the trust property of the client of a partnership, a partner who is not the trustee shall not be liable unless he is aware about misuse the trust by the other partner.

• True

• False

A person who is not a partner but has by words spoken or written or conduct presents himself to be represented as a partner in a partnership firm is liable as a partner to anyone believes on the his representation is known as _____ partner.

• Retired Partner

• Holding Out