Messitt and McNulty Spend $50, 000 Each to Form a Law

question 14

Multiple Choice

Messitt and McNulty spend $50, 000 each to form a law partnership.On the first day someone trips over a potted plant in their lobby and sues them for $400, 000.Which of the following is true?

• A)If a $400, 000 judgment is against the partnership, then each partner will have to pay $200, 000.
• B)If a $400, 000 judgment is against the partnership and if McNulty cannot afford to pay any of it, then Messitt is liable for $400, 000.
• C)Messitt's liability is limited to $300, 000 because she owns three quarters of the firm.
• D)Each individual partner cannot be sued for more than $200, 000.
• E)Only McNulty is personally responsible for the damages because he was the one who put the potted plant in the office.

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Definitions:

Gross Sales

The total sales revenue of a business before any deductions are made for returns, allowances, and discounts.

Building Cost

The total expenses incurred to acquire, construct, or improve a building, including material, labor, and other costs.

Allocated

The process of distributing resources or expenses among various departments, activities, or time periods.

Square Feet

A measurement of area equivalent to a square measuring one foot on each side.