Wally and Beaver were general partners in a car dealership. Using the partnershi

Question

Wally and Beaver were general partners in a car dealership. Using the partnership name, Wally entered into a contract to purchase 30 used cars from Car Lots. Car Lots was not aware that Wally was not authorized to enter into this type of agreement. When the cars were delivered, Beaver refused to accept the cars. Car Lots wants to enforce the contract. Each party will view this situation and the likely outcome to be different. What are the best arguments for Car Lots? What are the best arguments for the car dealership? After examining the facts and the various legal arguments on behalf of each party, make a final determination as to which party is most likely to win if this case were to go to court. Be sure to base your conclusions on your analysis taking into account the facts provided, reasonable assumptions and the relevant law (as opposed to listing your personal opinion).

Explanation / Answer

Wally and Beaver were general partners in a car dealership. Using the partnership name, Wally entered into a contract to purchase 30 used cars from Car Lots. Car Lots was not aware that Wally was not authorized to enter into this type of agreement. When the cars were delivered, Beaver refused to accept the cars. Car Lots wants to enforce the contract. Explain the arguments for Car Lots and the car dealership? Which party will win? Explain why. In a general partnership, both partners are equally responsible for the acts of the other and one partner can legally bind the partnership. Since Wally entered into the contract in the name of the partnership, it is a legally enforceable contract that Beaver cannot disclaim.

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