A partnership adds Ted as a partner to manage their clients' accounts,even after discovering he is a convict on parole for theft.After working for one week,Ted quits and cannot be located.The partners discover that Ted stole $5,000 of their clients' money.Which of the following is true regarding the partners' liability?
A)The partners are not liable.
B)The partners are liable because they authorized the commission of the criminal act.
C)The partners are liable because they knew of Ted's criminal tendencies yet placed him in a position where he may commit a crime.
D)The partners are liable because they participated in the criminal act.

Question

Quizplus · Accepted Answer

When a partner commits a crime in the course and scope of transacting partnership business,rarely are his partners criminally liable.But when the partners have participated in the criminal act or authorized its commission,they are liable.They may also be liable when they know of a partner's criminal tendencies yet place him in a position in which he may commit a crime.Here,the partners are liable because they knew Ted had a criminal history of theft yet tasked him with managing their clients' funds.

A Partnership Adds Ted as a Partner to Manage Their