Sam and Dave Are Going to Open a Sporting Goods

question 61

Multiple Choice

Sam and Dave are going to open a sporting goods store.They sign a written limited partnership agreement naming Dave as a limited partner and Sam the general partner.Sam files a certificate of limited partnership with the state.Sam contributes $100,000 toward the startup while Dave contributes $200,000 and they agree to split profits evenly because Sam will be working in the store and operating the day to day business.About a month after they open,the business is not doing well so Dave starts becoming more involved.Soon he is requiring that Sam approve all purchases with him and Dave is actively directing Jack,the sole other employee.One day,Geoff,a customer,is injured when a bowling ball falls off a shelf and shatters his foot.Geoff sues and is awarded a judgment of $1 million.

• A) as this was a limited partnership, Sam is liable for $800,000 and Dave is liable for $200,000
• B) Sam and Dave are each liable up to $500,000 each
• C) under the circumstances, Sam and Dave are both jointly and severally liable for the full $1 million
• D) whoever negligently secured the bowling ball on the shelf is liable for the $1 million liability

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Definitions:

Compulsive Craving

An intense, uncontrollable desire, often for a specific substance or activity that can lead to compulsive behavior.

Addiction

A chronic, relapsing disorder characterized by compulsive drug seeking, continued use despite harmful consequences, and long-lasting changes in the brain.

Adverse Consequences

Negative outcomes or effects that result from an action, decision, or situation.

Addictive Drugs

Substances that cause dependence and compulsive use, characterized by a need to increase dosage due to tolerance and by physiological and psychological withdrawal symptoms.