Chuck, Betty, and Bert form CB&B Partnership to run a specialty grocery store. Bert is the day-to-day manager of the store, Betty buys the groceries, and Chuck does all the administrative work. Betty decides she would like a new car to use when calling on prospective wholesalers. She makes a contract with Big Ben Motors in the name of CB&B without consulting Chuck and Bert. CB&B and the individual partners are:
A) bound by Betty's actual implied authority to buy a car.
B) bound by Betty's apparent authority to buy a car.
C) bound by estoppel.
D) not bound because buying a car is outside the scope of the partnership business.

Question

Quizplus · Accepted Answer

Betty's decision to buy a car for visiting wholesalers, without consulting Chuck and Bert, and without it being a clear part of her role in buying groceries, suggests that this action is outside the scope of the partnership's ordinary business activities. Partnerships are generally bound by the acts of any partner that are within the scope of the partnership's business, but buying a car does not directly relate to the operation of a specialty grocery store or the roles as described.

Chuck, Betty, and Bert Form CB&B Partnership to Run a Specialty