Partnership Formation. Daniel is the owner of achain of shoe stores. He hires Rubya to be the manager of anew store, which is to open in Grand Rapids, Michigan. Daniel, by written contract, agrees to pay Rubya a monthly salaryand 20 percent of the profits. Without Daniel’s knowledge,Rubya represents himself to Classen as Daniel’s partner andshows Classen the agreement to share profits. Classen extendscredit to Rubya. Rubya defaults. Discuss whether Classen canhold Daniel liable as a partner. (See Partnerships.)
Partnership Formation. Daniel is the owner of achain of shoe stores. He hires Rubya to be the manager of anew store, which is to open in Grand Rapids, Michigan. Daniel, by written contract, agrees to pay Rubya a monthly salaryand 20 percent of the profits. Without Daniel’s knowledge,Rubya represents himself to Classen as Daniel’s partner andshows Classen the agreement to share profits. Classen extendscredit to Rubya. Rubya defaults. Discuss whether Classen canhold Daniel liable as a partner. (See Partnerships.)
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Partnership Formation. Daniel is the owner of a
chain of shoe stores. He hires Rubya to be the manager of a
new store, which is to open in Grand Rapids, Michigan. Daniel, by written contract, agrees to pay Rubya a monthly salary
and 20 percent of the profits. Without Daniel’s knowledge,
Rubya represents himself to Classen as Daniel’s partner and
shows Classen the agreement to share profits. Classen extends
credit to Rubya. Rubya defaults. Discuss whether Classen can
hold Daniel liable as a partner. (See Partnerships.)
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