Question

A partner cannot bind the partnership to an outside purchase contract when

a. The item purchased is immaterial in amount.
b. The item purchased is not within the normal scope of the business.
c. The partner who made the purchase withdraws from the partnership.
d. The partner was not authorized by the other partners to make the purchase.

Answer 1

A partner cannot bind the partnership to an outside purchase contract when the item purchased is not within the normal scope of the business, the partner who made the purchase withdraws from the partnership, or the partner was not authorized by the other partners to make the purchase.

Step-by-step explanation:

A partner cannot bind the partnership to an outside purchase contract when:

1. The item purchased is not within the normal scope of the business. For example, if the partnership is a restaurant and one partner makes a purchase contract for construction materials, it would not be binding.
2. The partner who made the purchase withdraws from the partnership. Once a partner withdraws, they no longer have the authority to bind the partnership to contracts.
3. The partner was not authorized by the other partners to make the purchase. If a partner makes a purchase without the consent or authorization of the other partners, it will not be binding on the partnership.