Tom, Leanne, and Rahini carried on business together in partnership. Arrangements were made whereby each partner held a policy of life insurance on the other partners, and were the beneficiaries named in the policies. Several years later, Tom murdered Leanne. Neither Tom nor Rahini may recover the proceeds of the insurance policies they carried on Leanne because, as partners, Rahini would also be liable for the act of Tom.

Question

Quizplus · Accepted Answer

Rahini may still recover the proceeds of the insurance policy on Leanne because Rahini is not responsible for Tom's criminal actions. The principle of vicarious liability in partnership does not extend to criminal acts committed by one partner outside the scope of the partnership's business activities.

Tom, Leanne, and Rahini Carried on Business Together in Partnership