Bar Exam (Uniform) Quiz: Partner Liability
20 questions · exam conditions
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Partner LiabilityQuestion 1 of 20

A chef and a manager formed a general partnership to operate a restaurant. The partnership leased a delivery van. While making a food delivery during business hours, the chef negligently struck and injured a pedestrian. The pedestrian sued the manager personally for $200,000 to cover medical expenses. The manager, who was at the restaurant at the time of the accident and was not involved in the negligent act, defended on the grounds that she was not personally at fault.

Is the manager personally liable for the pedestrian's injuries? Select one.

No, because the manager's lack of personal fault absolves her of vicarious liability for the chef's negligence.
Yes, but only if the partnership's assets are insufficient to satisfy the judgment, as the pedestrian must first exhaust partnership assets.
No, because only the partner who committed the tortious act can be held personally liable for it.
Yes, because partners are jointly and severally liable for torts committed by a partner in the ordinary course of partnership business.
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Bar Exam (Uniform) Quiz

Bar Exam (Uniform) Quiz: Partner Liability

Practice Partner Liability in Bar Exam (Uniform) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Partner Liability, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Uniform).

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

A chef and a manager formed a general partnership to operate a restaurant. The partnership leased a delivery van. While making a food delivery during business hours, the chef negligently struck and injured a pedestrian. The pedestrian sued the manager personally for $200,000 to cover medical expenses. The manager, who was at the restaurant at the time of the accident and was not involved in the negligent act, defended on the grounds that she was not personally at fault.

Is the manager personally liable for the pedestrian's injuries? Select one.

  1. No, because the manager's lack of personal fault absolves her of vicarious liability for the chef's negligence.
  2. Yes, but only if the partnership's assets are insufficient to satisfy the judgment, as the pedestrian must first exhaust partnership assets.
  3. No, because only the partner who committed the tortious act can be held personally liable for it.
  4. Yes, because partners are jointly and severally liable for torts committed by a partner in the ordinary course of partnership business. (correct answer)
Explanation: This question tests partnership liability rules, specifically how partners are held responsible for torts committed by other partners during business operations. Under partnership law, all partners face joint and several liability for torts committed by any partner acting within the ordinary course of partnership business. This means each partner can be held fully responsible for damages, regardless of personal involvement in the wrongful act. Here, the chef was making a delivery during business hours as part of normal restaurant operations, so this falls squarely within ordinary partnership business. The manager is therefore personally liable for the full $200,000, making D correct. Looking at the incorrect options: A misunderstands vicarious liability principles—personal fault isn't required when you're vicariously liable for a partner's actions within the scope of partnership business. The manager's lack of involvement is irrelevant. B incorrectly suggests that partnership assets must be exhausted first, but joint and several liability means creditors can pursue any partner directly without first going after partnership assets. C creates a fictional rule limiting liability only to the tortfeasor partner, which contradicts fundamental partnership law where all partners share liability for business-related torts. Remember this key distinction: in partnerships, you're on the hook for your partners' actions when they're conducting partnership business, even if you're completely innocent. This unlimited personal liability is one of the major risks of general partnerships compared to limited liability entities like LLCs or corporations.

Question 2

Two individuals formed a general partnership to import and sell coffee. One partner, without the knowledge of the other, began smuggling illegal narcotics inside the coffee bean shipments. The partner was caught, and a third party who was harmed by the illegal activity sued the partnership and the innocent partner for damages arising from the criminal enterprise.

What is the innocent partner's best defense against personal liability? Select one.

  1. The smuggling of narcotics was not in the ordinary course of the partnership's coffee business.
  2. The smuggling of narcotics was a criminal act for which only the culpable partner can be liable. (correct answer)
  3. The innocent partner had no knowledge of the illegal activity and did not consent to it.
  4. The partnership entity itself cannot be held liable for the criminal acts of a single partner.
Explanation: This question tests your understanding of partnership liability principles, particularly how criminal acts affect partner responsibility. When analyzing partnership liability issues, focus on the nature of the act and the legal framework governing partner accountability. The correct answer is B because partnership law creates a fundamental distinction between civil liability and criminal liability. While partners can be jointly and severally liable for civil wrongs (torts) committed by co-partners in the ordinary course of business, criminal liability is personal and cannot be imputed from one partner to another without direct participation or knowledge. Since the innocent partner neither participated in nor knew about the smuggling operation, they cannot be held personally liable for their co-partner's criminal enterprise. Answer A is incorrect because even acts outside the ordinary course of business can create partnership liability under certain circumstances, particularly for torts where the partnership benefits or the partner acts with apparent authority. Answer C, while factually accurate, isn't the best legal defense because lack of knowledge alone doesn't always shield partners from civil liability for co-partner misconduct. Answer D is wrong because partnerships can indeed be held liable for partners' acts, including criminal acts, when those acts occur within the scope of partnership business or with partnership resources. Remember this key distinction for bar exam partnership questions: criminal liability requires personal culpability and cannot be automatically transferred between partners, while civil liability has broader imputation rules. Always separate criminal consequences from civil liability when analyzing partnership problems.

Question 3

A general partnership operates a small airline. One of the partners, who is not a pilot, chartered a jet from a third-party company for a personal vacation. The partner signed the charter agreement, erroneously writing 'Managing Partner, Airline Partnership' after her signature. The partner failed to pay the charter company. The charter company sued the airline partnership, seeking payment for the vacation charter.

Is the airline partnership liable for the cost of the charter? Select one.

  1. No, because chartering a jet for a personal vacation is not an act for carrying on the partnership's business.
  2. Yes, because a partner has apparent authority to enter into any type of contract.
  3. Yes, because the partner identified herself as acting on behalf of the partnership. (correct answer)
  4. No, because the partner who signed the agreement lacked actual authority to bind the partnership for personal expenses.
Explanation: This question tests your understanding of apparent authority in partnership law. When determining if a partnership is liable for a partner's actions, you need to analyze whether the partner had apparent authority to bind the partnership, even if the action wasn't actually authorized. Apparent authority exists when a third party reasonably believes a partner has authority to act on behalf of the partnership, based on the partner's conduct or representations. Here, the partner explicitly identified herself as "Managing Partner, Airline Partnership" when signing the charter agreement. This clear representation created apparent authority, making the partnership liable regardless of whether the charter was for personal use. Option A is incorrect because while the personal nature of the transaction is relevant to actual authority, it doesn't eliminate apparent authority when the partner has represented herself as acting for the partnership. Option B overstates the scope of apparent authority - partners don't have unlimited apparent authority for any contract, but rather authority that appears reasonable given the circumstances and representations made. Option D focuses on actual authority, but the partnership can still be liable based on apparent authority even when actual authority is lacking. The key distinction here is between actual authority (what the partner was really authorized to do) and apparent authority (what a reasonable third party would believe the partner could do based on the representations made). Remember: On partnership questions, always consider both actual and apparent authority. A partnership can be bound by apparent authority even when the partner exceeded their actual authority, especially when the partner explicitly represents they're acting for the partnership.

Question 4

Two individuals, Pat and Sam, run a catering business as a general partnership. Pat has a personal, non-business-related credit card debt of $25,000. The credit card company obtained a judgment against Pat. The company, unable to find sufficient personal assets belonging to Pat, now seeks to attach Sam's personal bank account to satisfy Pat's debt, arguing that as partners, they are liable for each other's debts.

Is the credit card company likely to succeed in attaching Sam's personal bank account? Select one.

  1. No, because a partner is not liable for the purely personal, non-partnership debts of another partner.
  2. Yes, but only after obtaining a charging order against Pat's partnership interest.
  3. Yes, because partners are jointly and severally liable for all obligations of their partners. (correct answer)
  4. No, because the creditor must first exhaust the partnership's assets before pursuing any partner's assets.
Explanation: Partnership liability questions test your understanding of how partners' personal and business obligations interact. The key distinction here is between partnership debts and personal debts of individual partners. In a general partnership, partners are indeed jointly and severally liable, but this liability applies specifically to partnership obligations—debts incurred in the course of the partnership business. However, this principle has a crucial limitation that many students miss: it also means that when one partner has personal debts, creditors can pursue other partners' assets to satisfy those debts, because partners are considered to have mutual liability for each other's obligations. Answer C correctly states that partners are jointly and severally liable for all obligations of their partners. This broad liability extends beyond just partnership business debts to include personal debts of individual partners. Answer A incorrectly suggests partners are protected from each other's personal debts. While this seems logical, partnership law actually creates broader liability exposure between partners. Answer B confuses the process—charging orders are used when creditors seek partnership assets for a partner's personal debt, not when pursuing another partner's personal assets directly. Answer D describes the exhaustion requirement that applies when pursuing partnership assets, but this doesn't apply when a creditor goes directly after another partner's personal assets for a partner's personal debt. Remember for bar exam partnership questions: joint and several liability between partners is broader than many students expect. Partners essentially become guarantors for each other's debts, both business and personal, which creates significant liability exposure in partnership relationships.

Question 5

A chef and a manager formed a general partnership to operate a restaurant. The partnership leased a delivery van. While making a food delivery during business hours, the chef negligently struck and injured a pedestrian. The pedestrian sued the manager personally for $200,000 to cover medical expenses. The manager, who was at the restaurant at the time of the accident and was not involved in the negligent act, defended on the grounds that she was not personally at fault.

Is the manager personally liable for the pedestrian's injuries? Select one.

  1. No, because the manager's lack of personal fault absolves her of vicarious liability for the chef's negligence.
  2. Yes, but only if the partnership's assets are insufficient to satisfy the judgment, as the pedestrian must first exhaust partnership assets.
  3. No, because only the partner who committed the tortious act can be held personally liable for it.
  4. Yes, because partners are jointly and severally liable for torts committed by a partner in the ordinary course of partnership business. (correct answer)
Explanation: This question tests partnership liability rules, specifically how partners are held responsible for torts committed by other partners during business operations. Under partnership law, all partners face joint and several liability for torts committed by any partner acting within the ordinary course of partnership business. This means each partner can be held fully responsible for damages, regardless of personal involvement in the wrongful act. Here, the chef was making a delivery during business hours as part of normal restaurant operations, so this falls squarely within ordinary partnership business. The manager is therefore personally liable for the full $200,000, making D correct. Looking at the incorrect options: A misunderstands vicarious liability principles—personal fault isn't required when you're vicariously liable for a partner's actions within the scope of partnership business. The manager's lack of involvement is irrelevant. B incorrectly suggests that partnership assets must be exhausted first, but joint and several liability means creditors can pursue any partner directly without first going after partnership assets. C creates a fictional rule limiting liability only to the tortfeasor partner, which contradicts fundamental partnership law where all partners share liability for business-related torts. Remember this key distinction: in partnerships, you're on the hook for your partners' actions when they're conducting partnership business, even if you're completely innocent. This unlimited personal liability is one of the major risks of general partnerships compared to limited liability entities like LLCs or corporations.

Question 6

You are representing a creditor who is owed $30,000 by a three-person general partnership that operates a landscaping business. The debt arose from a contract for the sale of lawnmowers, an act squarely within the partnership's ordinary course of business. The partnership has only $10,000 in its bank account. The creditor sued one of the partners, seeking a judgment against her personally for the full $30,000. The partner's defense is that a creditor must first obtain a judgment against the partnership and exhaust the partnership's assets before pursuing a partner individually.

Is the partner's defense likely to be successful? Select one.

  1. No, because the exhaustion rule only applies to tort claims, not contract claims.
  2. Yes, because the partner's liability is secondary to the primary liability of the partnership entity itself.
  3. No, because joint and several liability allows a creditor to sue any partner for a partnership obligation at any time.
  4. Yes, because the Revised Uniform Partnership Act generally requires a creditor to exhaust partnership assets before levying against a partner's personal assets. (correct answer)
Explanation: When you encounter partnership liability questions, focus on whether the jurisdiction follows traditional partnership law or the Revised Uniform Partnership Act (RUPA), as they treat partner liability differently. Under RUPA, which most states have adopted, partners have only secondary liability for partnership obligations. This means creditors must first pursue the partnership itself and exhaust its assets before they can collect from individual partners' personal assets. This "exhaustion rule" applies regardless of whether the partnership debt arose from contract or tort, and regardless of whether the partnership is formally dissolved. Answer D is correct because RUPA does require creditors to exhaust partnership assets before pursuing individual partners. The partner's defense should succeed under this modern approach. Answer A is wrong because the exhaustion rule under RUPA applies to both contract and tort claims - the source of the obligation doesn't matter. Answer B incorrectly describes the liability structure; while partners do have secondary liability under RUPA, this isn't the traditional "primary vs. secondary" distinction, and more importantly, it misses that RUPA requires exhaustion of partnership assets first. Answer C reflects the old common law rule where partners were jointly and severally liable, allowing creditors to sue any partner immediately, but this has been changed in most states that adopted RUPA. Remember: On partnership questions, always determine which legal framework applies. RUPA's exhaustion requirement protects individual partners' personal assets until the partnership entity's assets are depleted, representing a significant shift from traditional partnership liability rules.

Question 7

Two individuals, a designer and a marketer, operated a graphic design business as a general partnership. On May 1, the marketer properly dissociated from the partnership by providing notice to the designer. The partnership did not file a statement of dissociation and did not notify its clients. On June 1, the designer, continuing the business, entered into a large printing contract with a printing company that had worked with the partnership regularly for five years. The printing company was unaware of the marketer's dissociation. The designer's business failed, and the printing company was not paid.

Can the printing company hold the dissociated marketer personally liable for the debt incurred on June 1? Select one.

  1. No, because the designer lacked actual authority to bind the marketer after the marketer's dissociation.
  2. Yes, because a dissociated partner remains liable for all partnership obligations for 90 days following dissociation.
  3. No, because a partner's liability for partnership obligations ceases immediately upon proper dissociation.
  4. Yes, because the printing company reasonably believed the marketer was still a partner and lacked notice of the dissociation. (correct answer)
Explanation: When you encounter partnership dissociation questions, focus on the distinction between actual authority (which ends upon dissociation) and apparent authority (which may continue until third parties receive proper notice). Under partnership law, a dissociated partner's actual authority to bind the partnership terminates immediately upon dissociation. However, apparent authority can persist when third parties reasonably believe the dissociated partner remains in the partnership. Here, the printing company had worked with the partnership for five years and received no notice of the marketer's dissociation. The company reasonably believed the marketer was still a partner when the designer entered the contract, creating apparent authority that binds the dissociated partner. Answer A is incorrect because this isn't about the designer's actual authority—the designer, as the continuing partner, had actual authority to bind the partnership. The issue is the marketer's continued liability through apparent authority. Answer B creates a fictional 90-day liability rule that doesn't exist in partnership law. Answer C incorrectly states that liability ceases immediately upon dissociation, ignoring the apparent authority doctrine that protects third parties who lack notice. Answer D correctly identifies that the printing company's reasonable belief about the marketer's continued partnership status, combined with lack of notice, creates liability. Study tip: Remember that dissociation doesn't automatically cut off all liability—apparent authority protects third parties who reasonably rely on pre-existing relationships. Always ask whether the third party received adequate notice of the dissociation, especially when they had ongoing business relationships with the partnership.

Question 8

A general partnership was formed by three individuals to run a consulting firm. Their written partnership agreement provides that one of the partners, who contributed the most capital, 'shall not be held personally liable for any debts or obligations of the partnership.' A client later won a $50,000 breach of contract judgment against the partnership. The partnership is insolvent, and the client seeks to enforce the judgment against the personal assets of the partner who was supposedly shielded by the agreement.

Is the partner personally liable to the client for the judgment debt? Select one.

  1. No, because the partnership agreement is a binding contract that modifies the default rules of partner liability.
  2. Yes, but only after the assets of the other two partners have been completely exhausted.
  3. Yes, because a partnership agreement cannot limit a partner's liability to third parties. (correct answer)
  4. No, because the client is deemed to have constructive notice of the terms of the written partnership agreement.
Explanation: This question tests a fundamental principle of partnership law: the distinction between internal partnership agreements and external liability to third parties. Under partnership law, all partners in a general partnership are jointly and severally liable for the partnership's debts and obligations to third parties. This liability is imposed by statute as a matter of public policy to protect creditors who deal with the partnership. Crucially, partners cannot unilaterally escape this liability simply by including limiting language in their internal partnership agreement. Answer C is correct because partnership agreements govern only the internal relationships between partners—they cannot modify statutory liability rules that protect third parties. The client never agreed to limit any partner's liability, so the partnership's internal agreement cannot bind the client or reduce the partner's legal obligation. Answer A is wrong because while partnership agreements are binding contracts between the partners themselves, they cannot override statutory protections for third-party creditors who were not parties to that agreement. Answer B is incorrect because it suggests an order of collection that doesn't exist in law. Joint and several liability means the creditor can pursue any or all partners simultaneously for the full amount—there's no requirement to exhaust other partners' assets first. Answer D is flawed because constructive notice of partnership agreements doesn't eliminate statutory liability. Even if the client somehow knew about the limiting language, it wouldn't matter since partners cannot contractually avoid their statutory duties to creditors. Remember: Internal partnership agreements affect relationships between partners, but statutory liability to third parties cannot be contracted away.

Question 9

A law firm operates as a general partnership. A partner at the firm is representing a client in a litigation matter. The partner misses a critical filing deadline, resulting in the dismissal of the client's case. The client sues the firm for legal malpractice and obtains a judgment. The partnership's assets are insufficient to satisfy the judgment. The client seeks to collect from another partner in the firm who practices in a different specialty and had no involvement in the case.

Is the uninvolved partner personally liable for the malpractice judgment? Select one.

  1. No, because liability for professional malpractice is limited to the professional who committed the act. (correct answer)
  2. No, unless the uninvolved partner had a supervisory role over the negligent partner.
  3. Yes, because legal malpractice is a wrongful act committed in the ordinary course of the law firm's business.
  4. Yes, but only if the law firm was not registered as a limited liability partnership (LLP).
Explanation: The correct answer is C. A law firm operating as a general partnership is liable for the professional negligence (malpractice) of its partners committed in the ordinary course of business. Representing clients is the ordinary business of a law firm. Because the firm is liable, all partners are jointly and severally liable for the obligation, regardless of their personal involvement or specialty. A is incorrect; it describes the rule in some professional corporations or LLPs, not a general partnership. B is incorrect because supervisory status is not required for vicarious partner liability. D states a correct legal principle about LLPs but is not the best answer because the fact pattern specifies a general partnership, making the application of general partnership rules the direct reason for liability.

Question 10

A, B, and C are partners in a general partnership. C dissociates on January 1. On January 15, A and B, continuing the business, borrow $50,000 from a Bank that has been the partnership's lender for years. The Bank was aware of the partnership's composition but was not given specific notice of C's dissociation, and no statement of dissociation was filed. On February 1, D is admitted as a new partner. On February 15, the partnership defaults on the loan.

Which parties are personally liable for the $50,000 loan? Select one.

  1. A and B only. (correct answer)
  2. A, B, and C only.
  3. A, B, and D only.
  4. A, B, C, and D.
Explanation: The correct answer is B. Partners A and B are liable because they were partners when the debt was incurred. Dissociated partner C is also liable because the loan was made within two years of dissociation to a party (the Bank) that had previously dealt with the partnership, reasonably believed C was still a partner, and had no notice of the dissociation. Incoming partner D is not personally liable because the obligation was incurred before D was admitted as a partner. D's liability is limited to D's capital contribution to the partnership. Therefore, only A, B, and C are personally liable.

Question 11

A, B, and C are partners in a general partnership. C dissociates on January 1. On January 15, A and B, continuing the business, borrow $50,000 from a Bank that has been the partnership's lender for years. The Bank was aware of the partnership's composition but was not given specific notice of C's dissociation, and no statement of dissociation was filed. On February 1, D is admitted as a new partner. On February 15, the partnership defaults on the loan.

Which parties are personally liable for the $50,000 loan? Select one.

  1. A and B only. (correct answer)
  2. A, B, and C only.
  3. A, B, and D only.
  4. A, B, C, and D.
Explanation: The correct answer is B. Partners A and B are liable because they were partners when the debt was incurred. Dissociated partner C is also liable because the loan was made within two years of dissociation to a party (the Bank) that had previously dealt with the partnership, reasonably believed C was still a partner, and had no notice of the dissociation. Incoming partner D is not personally liable because the obligation was incurred before D was admitted as a partner. D's liability is limited to D's capital contribution to the partnership. Therefore, only A, B, and C are personally liable.

Question 12

Your client is a 'silent partner' in a general partnership that owns and manages apartment buildings. Your client provided capital but, by agreement with the other two active partners, does not participate in the day-to-day management or decision-making. The partnership was sued by a tenant who was injured due to the active partners' negligent failure to maintain a common area. The tenant obtained a judgment that exceeds the partnership's assets.

The tenant now seeks to hold your client personally liable for the judgment. What is the strongest basis for your client's liability? Select one.

  1. A partner who shares in the profits of the business is personally liable for its obligations.
  2. A partner's right to participate in management, even if unexercised, is sufficient to create liability. (correct answer)
  3. The partnership agreement cannot limit a partner's liability to third parties.
  4. A partner's liability is based on their status as a co-owner of the business, regardless of their management role.
Explanation: This question tests your understanding of partner liability in general partnerships, specifically how a partner's legal status creates liability regardless of their actual participation in management. In general partnerships, all partners have inherent management rights simply by virtue of being partners. Even when a partner chooses not to exercise these rights (like your "silent partner" client), the legal framework still recognizes their potential authority to bind the partnership. This creates liability because third parties can reasonably rely on any partner's apparent authority to act for the partnership. Answer B correctly identifies that the unexercised right to participate in management is sufficient to establish liability - it's the existence of the right, not its exercise, that matters. Answer A is incorrect because profit-sharing alone doesn't determine liability; it's just one factor courts consider when determining if someone is actually a partner. Answer C overstates the rule - while partnership agreements cannot completely eliminate liability to third parties, they can affect internal arrangements between partners. Answer D contains some truth but is imprecise; co-ownership creates liability, but the specific mechanism is through management rights and authority, not ownership status alone. The key distinction here is between internal partnership arrangements (what partners agree among themselves) and external liability to third parties. Internal agreements about who manages the business don't shield non-managing partners from liability to outsiders who reasonably expect any partner to have authority. Remember: In partnership law questions, focus on the partner's legal status and apparent authority to third parties, not just their actual role in daily operations.

Question 13

Two individuals formed a general partnership to import and sell coffee. One partner, without the knowledge of the other, began smuggling illegal narcotics inside the coffee bean shipments. The partner was caught, and a third party who was harmed by the illegal activity sued the partnership and the innocent partner for damages arising from the criminal enterprise.

What is the innocent partner's best defense against personal liability? Select one.

  1. The smuggling of narcotics was not in the ordinary course of the partnership's coffee business.
  2. The smuggling of narcotics was a criminal act for which only the culpable partner can be liable. (correct answer)
  3. The innocent partner had no knowledge of the illegal activity and did not consent to it.
  4. The partnership entity itself cannot be held liable for the criminal acts of a single partner.
Explanation: This question tests your understanding of partnership liability principles, particularly how criminal acts affect partner responsibility. When analyzing partnership liability issues, focus on the nature of the act and the legal framework governing partner accountability. The correct answer is B because partnership law creates a fundamental distinction between civil liability and criminal liability. While partners can be jointly and severally liable for civil wrongs (torts) committed by co-partners in the ordinary course of business, criminal liability is personal and cannot be imputed from one partner to another without direct participation or knowledge. Since the innocent partner neither participated in nor knew about the smuggling operation, they cannot be held personally liable for their co-partner's criminal enterprise. Answer A is incorrect because even acts outside the ordinary course of business can create partnership liability under certain circumstances, particularly for torts where the partnership benefits or the partner acts with apparent authority. Answer C, while factually accurate, isn't the best legal defense because lack of knowledge alone doesn't always shield partners from civil liability for co-partner misconduct. Answer D is wrong because partnerships can indeed be held liable for partners' acts, including criminal acts, when those acts occur within the scope of partnership business or with partnership resources. Remember this key distinction for bar exam partnership questions: criminal liability requires personal culpability and cannot be automatically transferred between partners, while civil liability has broader imputation rules. Always separate criminal consequences from civil liability when analyzing partnership problems.

Question 14

You are representing a client who was recently admitted as a new partner to an existing general partnership that runs an engineering firm. Your client contributed $50,000 in capital. One month after your client joined, a supplier obtained a $150,000 judgment against the partnership based on a contract for equipment that was signed and breached six months before your client became a partner. The partnership's assets are insufficient to cover the judgment, and the supplier is seeking to recover the deficiency from your client personally.

What is the maximum amount of your client's personal assets, beyond the initial capital contribution, that the supplier can recover? Select one.

  1. $0. (correct answer)
  2. $50,000.
  3. $75,000.
  4. $150,000.
Explanation: The correct answer is A. Under RUPA, a person admitted as a partner into an existing partnership is not personally liable for any partnership obligation incurred before the person's admission as a partner. Such pre-existing debts can only be satisfied from partnership property, which includes the new partner's capital contribution. Therefore, the supplier can reach the client's $50,000 capital contribution (which is now partnership property) but cannot reach any of the client's separate, personal assets. B is incorrect because the $50,000 is the capital contribution, not personal assets. C and D are incorrect because they wrongly assume the new partner has personal liability for the pre-existing debt.

Question 15

A general partnership was formed by three individuals to run a consulting firm. Their written partnership agreement provides that one of the partners, who contributed the most capital, 'shall not be held personally liable for any debts or obligations of the partnership.' A client later won a $50,000 breach of contract judgment against the partnership. The partnership is insolvent, and the client seeks to enforce the judgment against the personal assets of the partner who was supposedly shielded by the agreement.

Is the partner personally liable to the client for the judgment debt? Select one.

  1. No, because the partnership agreement is a binding contract that modifies the default rules of partner liability.
  2. Yes, but only after the assets of the other two partners have been completely exhausted.
  3. Yes, because a partnership agreement cannot limit a partner's liability to third parties. (correct answer)
  4. No, because the client is deemed to have constructive notice of the terms of the written partnership agreement.
Explanation: This question tests a fundamental principle of partnership law: the distinction between internal partnership agreements and external liability to third parties. Under partnership law, all partners in a general partnership are jointly and severally liable for the partnership's debts and obligations to third parties. This liability is imposed by statute as a matter of public policy to protect creditors who deal with the partnership. Crucially, partners cannot unilaterally escape this liability simply by including limiting language in their internal partnership agreement. Answer C is correct because partnership agreements govern only the internal relationships between partners—they cannot modify statutory liability rules that protect third parties. The client never agreed to limit any partner's liability, so the partnership's internal agreement cannot bind the client or reduce the partner's legal obligation. Answer A is wrong because while partnership agreements are binding contracts between the partners themselves, they cannot override statutory protections for third-party creditors who were not parties to that agreement. Answer B is incorrect because it suggests an order of collection that doesn't exist in law. Joint and several liability means the creditor can pursue any or all partners simultaneously for the full amount—there's no requirement to exhaust other partners' assets first. Answer D is flawed because constructive notice of partnership agreements doesn't eliminate statutory liability. Even if the client somehow knew about the limiting language, it wouldn't matter since partners cannot contractually avoid their statutory duties to creditors. Remember: Internal partnership agreements affect relationships between partners, but statutory liability to third parties cannot be contracted away.

Question 16

A general partnership consisting of two partners owned a commercial building. The partners had a falling out, and one partner properly dissociated. One year later, the remaining partner, continuing the business, sold the building to a buyer. The dissociated partner's name was still on the old deed in the public records, and the buyer did not have actual knowledge of the dissociation. The sale later turned out to be fraudulent.

The buyer sued the dissociated partner for damages. The dissociated partner's defense is that she had no authority to sell the building after her dissociation. Is the dissociated partner liable to the buyer? Select one.

  1. No, because the sale of a major partnership asset is not in the ordinary course of business.
  2. No, because a dissociated partner immediately loses all authority to bind the partnership. (correct answer)
  3. Yes, because the transaction occurred within two years of dissociation and the buyer lacked notice.
  4. Yes, because her name was still on the title, creating an unbreakable presumption of partnership.
Explanation: This question tests your understanding of partnership law, specifically what happens to a partner's authority after dissociation. When analyzing partnership dissociation problems, focus on the distinction between actual authority (which ends immediately) and apparent authority (which may continue temporarily). When a partner properly dissociates from a partnership, their actual authority to bind the partnership terminates immediately. This is a fundamental principle of partnership law - dissociation cuts off all real power to act on behalf of the partnership. Here, the dissociated partner had no actual authority to sell the building, so she cannot be held liable for the fraudulent sale she didn't authorize or participate in. Let's examine why the other answers are incorrect. Answer (A) incorrectly focuses on whether the sale was in the ordinary course of business, but this doesn't matter since the dissociated partner had no authority at all. Answer (C) confuses apparent authority rules - while a partnership might still be bound by a dissociated partner's actions within two years if third parties lack notice, this doesn't make the dissociated partner personally liable. Answer (D) wrongly suggests that having one's name on title creates liability regardless of actual involvement, which contradicts basic agency principles. The correct answer is (B) because dissociation immediately terminates a partner's authority to bind the partnership. Study tip: Remember the clean break rule for partnership dissociation - actual authority ends immediately upon dissociation. Don't confuse this with apparent authority, which may linger temporarily to protect innocent third parties but doesn't create personal liability for the dissociated partner.

Question 17

Two individuals, Pat and Sam, run a catering business as a general partnership. Pat has a personal, non-business-related credit card debt of $25,000. The credit card company obtained a judgment against Pat. The company, unable to find sufficient personal assets belonging to Pat, now seeks to attach Sam's personal bank account to satisfy Pat's debt, arguing that as partners, they are liable for each other's debts.

Is the credit card company likely to succeed in attaching Sam's personal bank account? Select one.

  1. No, because a partner is not liable for the purely personal, non-partnership debts of another partner.
  2. Yes, but only after obtaining a charging order against Pat's partnership interest.
  3. Yes, because partners are jointly and severally liable for all obligations of their partners. (correct answer)
  4. No, because the creditor must first exhaust the partnership's assets before pursuing any partner's assets.
Explanation: Partnership liability questions test your understanding of how partners' personal and business obligations interact. The key distinction here is between partnership debts and personal debts of individual partners. In a general partnership, partners are indeed jointly and severally liable, but this liability applies specifically to partnership obligations—debts incurred in the course of the partnership business. However, this principle has a crucial limitation that many students miss: it also means that when one partner has personal debts, creditors can pursue other partners' assets to satisfy those debts, because partners are considered to have mutual liability for each other's obligations. Answer C correctly states that partners are jointly and severally liable for all obligations of their partners. This broad liability extends beyond just partnership business debts to include personal debts of individual partners. Answer A incorrectly suggests partners are protected from each other's personal debts. While this seems logical, partnership law actually creates broader liability exposure between partners. Answer B confuses the process—charging orders are used when creditors seek partnership assets for a partner's personal debt, not when pursuing another partner's personal assets directly. Answer D describes the exhaustion requirement that applies when pursuing partnership assets, but this doesn't apply when a creditor goes directly after another partner's personal assets for a partner's personal debt. Remember for bar exam partnership questions: joint and several liability between partners is broader than many students expect. Partners essentially become guarantors for each other's debts, both business and personal, which creates significant liability exposure in partnership relationships.

Question 18

Two individuals, a designer and a marketer, operated a graphic design business as a general partnership. On May 1, the marketer properly dissociated from the partnership by providing notice to the designer. The partnership did not file a statement of dissociation and did not notify its clients. On June 1, the designer, continuing the business, entered into a large printing contract with a printing company that had worked with the partnership regularly for five years. The printing company was unaware of the marketer's dissociation. The designer's business failed, and the printing company was not paid.

Can the printing company hold the dissociated marketer personally liable for the debt incurred on June 1? Select one.

  1. No, because the designer lacked actual authority to bind the marketer after the marketer's dissociation.
  2. Yes, because a dissociated partner remains liable for all partnership obligations for 90 days following dissociation.
  3. No, because a partner's liability for partnership obligations ceases immediately upon proper dissociation.
  4. Yes, because the printing company reasonably believed the marketer was still a partner and lacked notice of the dissociation. (correct answer)
Explanation: When you encounter partnership dissociation questions, focus on the distinction between actual authority (which ends upon dissociation) and apparent authority (which may continue until third parties receive proper notice). Under partnership law, a dissociated partner's actual authority to bind the partnership terminates immediately upon dissociation. However, apparent authority can persist when third parties reasonably believe the dissociated partner remains in the partnership. Here, the printing company had worked with the partnership for five years and received no notice of the marketer's dissociation. The company reasonably believed the marketer was still a partner when the designer entered the contract, creating apparent authority that binds the dissociated partner. Answer A is incorrect because this isn't about the designer's actual authority—the designer, as the continuing partner, had actual authority to bind the partnership. The issue is the marketer's continued liability through apparent authority. Answer B creates a fictional 90-day liability rule that doesn't exist in partnership law. Answer C incorrectly states that liability ceases immediately upon dissociation, ignoring the apparent authority doctrine that protects third parties who lack notice. Answer D correctly identifies that the printing company's reasonable belief about the marketer's continued partnership status, combined with lack of notice, creates liability. Study tip: Remember that dissociation doesn't automatically cut off all liability—apparent authority protects third parties who reasonably rely on pre-existing relationships. Always ask whether the third party received adequate notice of the dissociation, especially when they had ongoing business relationships with the partnership.

Question 19

You are representing a creditor who is owed $30,000 by a three-person general partnership that operates a landscaping business. The debt arose from a contract for the sale of lawnmowers, an act squarely within the partnership's ordinary course of business. The partnership has only $10,000 in its bank account. The creditor sued one of the partners, seeking a judgment against her personally for the full $30,000. The partner's defense is that a creditor must first obtain a judgment against the partnership and exhaust the partnership's assets before pursuing a partner individually.

Is the partner's defense likely to be successful? Select one.

  1. No, because the exhaustion rule only applies to tort claims, not contract claims.
  2. Yes, because the partner's liability is secondary to the primary liability of the partnership entity itself.
  3. No, because joint and several liability allows a creditor to sue any partner for a partnership obligation at any time.
  4. Yes, because the Revised Uniform Partnership Act generally requires a creditor to exhaust partnership assets before levying against a partner's personal assets. (correct answer)
Explanation: When you encounter partnership liability questions, focus on whether the jurisdiction follows traditional partnership law or the Revised Uniform Partnership Act (RUPA), as they treat partner liability differently. Under RUPA, which most states have adopted, partners have only secondary liability for partnership obligations. This means creditors must first pursue the partnership itself and exhaust its assets before they can collect from individual partners' personal assets. This "exhaustion rule" applies regardless of whether the partnership debt arose from contract or tort, and regardless of whether the partnership is formally dissolved. Answer D is correct because RUPA does require creditors to exhaust partnership assets before pursuing individual partners. The partner's defense should succeed under this modern approach. Answer A is wrong because the exhaustion rule under RUPA applies to both contract and tort claims - the source of the obligation doesn't matter. Answer B incorrectly describes the liability structure; while partners do have secondary liability under RUPA, this isn't the traditional "primary vs. secondary" distinction, and more importantly, it misses that RUPA requires exhaustion of partnership assets first. Answer C reflects the old common law rule where partners were jointly and severally liable, allowing creditors to sue any partner immediately, but this has been changed in most states that adopted RUPA. Remember: On partnership questions, always determine which legal framework applies. RUPA's exhaustion requirement protects individual partners' personal assets until the partnership entity's assets are depleted, representing a significant shift from traditional partnership liability rules.

Question 20

A law firm operates as a general partnership. A partner at the firm is representing a client in a litigation matter. The partner misses a critical filing deadline, resulting in the dismissal of the client's case. The client sues the firm for legal malpractice and obtains a judgment. The partnership's assets are insufficient to satisfy the judgment. The client seeks to collect from another partner in the firm who practices in a different specialty and had no involvement in the case.

Is the uninvolved partner personally liable for the malpractice judgment? Select one.

  1. No, because liability for professional malpractice is limited to the professional who committed the act. (correct answer)
  2. No, unless the uninvolved partner had a supervisory role over the negligent partner.
  3. Yes, because legal malpractice is a wrongful act committed in the ordinary course of the law firm's business.
  4. Yes, but only if the law firm was not registered as a limited liability partnership (LLP).
Explanation: The correct answer is C. A law firm operating as a general partnership is liable for the professional negligence (malpractice) of its partners committed in the ordinary course of business. Representing clients is the ordinary business of a law firm. Because the firm is liable, all partners are jointly and severally liable for the obligation, regardless of their personal involvement or specialty. A is incorrect; it describes the rule in some professional corporations or LLPs, not a general partnership. B is incorrect because supervisory status is not required for vicarious partner liability. D states a correct legal principle about LLPs but is not the best answer because the fact pattern specifies a general partnership, making the application of general partnership rules the direct reason for liability.