What are the rights of Doug against Roy Lumber Company, Albert, Betty, and Carol?

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What are the rights of Doug against Roy Lumber Company, Albert, Betty, and Carol?


Albert, Betty, and Carol own and operate the Roy Lumber Company. Each contributed one-third of the capital, and they share equally in the profits and losses. Their partnership agreement provides that two partners must authorize all purchases over $2,500 in advance and that only Albert is authorized to draw checks. Unknown to Albert or Carol, Betty purchases on the firm’s account a $5,500 diamond bracelet and a $5,000 forklift and orders $5,000 worth of logs, all from Doug, who operates a jewelry store and is engaged in various activities connected with the lumber business. Before Betty made these purchases, Albert told Doug that Betty is not the log buyer. Albert refuses to pay Doug for Betty’s purchases. Doug calls at the mill to collect, and Albert again refuses to pay him. Doug calls Albert an unprintable name, and Albert then punches Doug in the nose, knocking him out. While Doug is lying unconscious on the ground, an employee of Roy Lumber Company negligently drops a log on Doug’s leg, breaking three bones. The firm and the three partners are completely solvent. What are the rights of Doug against Roy Lumber Company, Albert, Betty, and Carol?

Explanation & AnswerSolution by a verified expert


Right of Individual D are as follows:

As per the contract, Person D was not authorized to make the purchase and was aware of such authorization. Since the authority was breached, Person D will be personally responsible to pay the price of logs.
Person D was not known about the restriction of partnership contract relating to the amount of $2,500, and the purchase fell under Person B's authority. So, Organization R is required to compensate Person D for the forklift truck.
The purchase of the bracelet was not made in the ordinary course of business; hence Organization R is not responsible for purchase of bracelet
The incident occurred as a result of negligence. Any tort committed by an employee, which falls under the scope of its employment, makes the organization liable for payment.

Verified Answer

The rights are as follows:

Organization R is not responsible for the price of logs, instead Person B is liable for the same.
Organization R has to pay for the forklift truck.
Organization R is not liable for payment of diamond bracelet, rather it should be paid by Person B.
Organization R is responsible for the leg injury of Person D.

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