Answer to Question #256211 in Law for jayme

Question

Abram, Bob and Cathy are in a partnership trading as retailers for stationery products. In terms of their partnership agreement only Abram has the right to represent the partnership. For the past two years Bob has regularly entertained clients at Dick’s Restaurant, and the corporation has never hesitated to settle the account. On his fortieth birthday Bob treats his friends to a lavish dinner at Dick’s Restaurant and charges the bill to the corporation’s account. Abram and Cathy are furious, but Bob does not have the money to settle the account personally. Can Dick’s Restaurant hold the partnership liable? Discuss in full.

Answer 1

Establishing a contract, terms are crucial for validity reasons. Abraham, Bos and Cathy established that Bob had the right to represent the partnership, thus only a representative of their partnership for business not personal reasons. As such therefore, none of the partners has the right to use the company resources, as Bob deed. Therefore, the restaurant should not hold the partnership liable but Bob since all the birthdays expenses were personal.