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Question 57

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Merriweather and Sadweather are partners. One day, feeling particularly sad, Sadweather purchases a 55” LED television and a leather couch for their office. Merriweather objects and refuses to pay. Which of the following is true?

Select one:

a.
The partnership will deduct the cost of the furniture from Sadweather's share of the profits.

b.
Sadweather must remove the television from the office.

c.
The partnership does not need to pay for the items because Merriweather did not pre-approve the purchase.

d.
The partnership must pay for the items because Sadweather is an agent of the partnership.

Answer 1

Ans: The partnership does not need to pay for the items because Merriweather did not pre-approve the purchase.

As the Sadweather is a partner of the firm and therefore he has purchased it put of his boredom without caring for the prior approval of the partner members. Partner Authority is limited and all the decisions whether be that of purchase of sale should obtain consent from other partner members. Therefore, in the above case, the partnership is exempted to pay for the purchases on the account that no approval was obtained and that the purchase is ultra vires or beyond the power or authority of the person exercising it.