Dennis and Claudia were partners who operated a retail store. They agreed to end the partnership. Dennis agreed to stay at the store and oversee the going-out-of-business sale. Claudia agreed to deal with the accountants and other related matters not
directly related to the hands-on operation of running the store. Claudia received notice that the store's liability policy would expire on July 1 . She decided not to renew the policy and let it lapse. The going-out-of-business sale would not be completed until August 1 . In July, a customer slipped and fell in the store. When Dennis learned that Claudia had allowed the liability policy to lapse, he was very upset and claimed he should not be liable for the customer's injury. Is Dennis liable to the customer? Explain.
Yes. A partner always has the authority to act as an agent of the partnership and is always the agent of her other partner(s). In this case, whether or not Claudia acted properly in allowing the policy to lapse is not relevant to Dennis's potential liability to the customer. He may or may not have a claim against Claudia; however, he is liable to the customer for the injury and Claudia is also responsible.
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