When an outsider dealing with a partner, does not know or does not believe that he is contracting with a partner, but an individual only
Verified Answer
A. The firm incurs no liability even if benefits of the contract has gone to the firm
B. The firm incurs liability even if the benefits of the contract has not gone to the firm
C. The firm incurs liability if the benefits of contract has gone to the firm
D. Either (A) or (C)
Explanation:
Even if an outsider deals with a partner believing them to be an individual, the firm can still be held liable if it has received the benefits of the contract. This is based on the principle of unjust enrichment and implied agency where the firm ratifies the act by accepting the benefits.