ACCA Applied Skills · Corporate and Business Law (Global) · Partnerships
Uma, Victor and Wen carry on business in partnership. After dissolution, Victor continues to use the firm's name and sells goods to a customer who was unaware of the dissolution. Which statement best describes the position of Uma, who has retired in the dissolution?
Dissolution does not automatically end a partner's apparent authority towards people who dealt with the firm and had no notice of it. Uma may therefore remain liable to the customer unless proper notice of the dissolution was given.
- AUma has no liability because the partnership was dissolved
- BUma may remain liable to that customer if no notice of dissolution was given to those who dealt with the firmCorrect
- CUma is liable only if the customer proves she personally agreed to the sale
- DUma is liable only to the other partners for contribution
Explanation
Dissolution does not by itself end partners' apparent authority to third parties who had no notice. Partners should give notice to existing customers and public notice for others. Option A overlooks this, since apparent authority can continue until notice is given.
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