Question

Jane and Ridge are partners in a computer animation firm. Jane retires from the firm, but tells Ridge it is OK to leave his name on the entrance door to the firm and in the telephone listing. Alex, a new client, visits the firm after telephoning the firm. Alex has seen Jane's name listed in the phone book along with Ridge's and the firm's names. He also sees Jane's name on the entrance door to the firm. Believing Jane is a partner with Ridge, Alex contracts to have the firm develop animation for his upcoming film. Ridge, however, never performs the contract. Alex sues Ridge and Jane. Is Jane liable to Alex?

Answer 1

Yes, Jane is liable to Alex when the Ridge did not perform the contract with Alex.

Explanation: As per the situation, Jane and Ridge are considered as Purported Partners. Purported Partner refers to the relationship between two or more individuals that give impressions to be partners of the firm. If one person purports to be a partner or conduct like they are a partner in a firm or give consent to represent his name as a partner in the firm is called a Purported Partner relationship.

When Jane retired from the firm but he gives consent to put his name on the entrance door and in the contact list, assumed by the Alex that Jane is also a partner in the firm. Jane has given the consent to use his name in the business and Alex assumed that he is a partner, when he sues due to non-performing the contract the Jane would be liable as per the law.

The purported partner will be personally liable for the obligation of the partnership because they had been a partner in the firm and third-party assumed that they have a partnership relationship in the firm.