All of the Following Statements About Partnerships Are True Except

question 161

Multiple Choice

All of the following statements about partnerships are true except

• A)partners must share profits and losses equally.
• B)a change in ownership will dissolve the partnership.
• C)any partner can enter into a binding agreement with a third party.
• D)all partners have unlimited liability.

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Definitions:

Negligence

A failure to act with the care that a reasonably prudent person would exercise under the same circumstances, often leading to liability for resulting damages.

Privity of Contract

The principle that a contract confers rights and imposes liabilities only on its parties; no outsider can gain rights or be liable under it.

Novation

The process of replacing an existing obligation with a new one, substituting a party or terms in a contract with the consent of all parties involved.

Rules of Interpretation

Guidelines and principles used to determine the meaning and intention of legal texts and statutory provisions.