After a partner dissociates, which statement about authority to bind the partnership is accurate?

After a partner dissociates, which statement about authority to bind the partnership is accurate?

• A. The dissociated partner retains actual authority.
• B. There is no authority possible for anyone.
• C. The remaining partners always lack authority to bind the partnership.
• D. The dissociated partner may have no actual authority, but a third party may rely on apparent authority if they believe.

Answer: (D)

When a partner dissociates, actual authority to bind the partnership generally ends. The dissociated partner cannot create new binding agreements for the partnership through actual authority. However, a third party may still be able to bind the partnership through apparent authority if the third party reasonably believes the dissociated partner is still a partner, based on the partnership’s representations or conduct. This reliance must be reasonable and based on what the partnership has communicated or how it has acted; the dissociated partner’s own actions alone don’t create actual authority. So the accurate statement is that the dissociated partner may have no actual authority, but a third party may rely on apparent authority if they reasonably believe the partner is still part of the partnership.

When a partner dissociates, actual authority to bind the partnership generally ends. The dissociated partner cannot create new binding agreements for the partnership through actual authority. However, a third party may still be able to bind the partnership through apparent authority if the third party reasonably believes the dissociated partner is still a partner, based on the partnership’s representations or conduct. This reliance must be reasonable and based on what the partnership has communicated or how it has acted; the dissociated partner’s own actions alone don’t create actual authority. So the accurate statement is that the dissociated partner may have no actual authority, but a third party may rely on apparent authority if they reasonably believe the partner is still part of the partnership.