Document Type



Journal of Small and Emerging Business Law




This Article addresses the decision by the drafters of the revised Uniform Partnership Act (1996) (RUPA) to reduce the traditional defenses available to partnerships in apparent authority cases. RUPA eliminated the requirement that apparent authority claims against a partnership be based on the claimant's reasonable expectations. Under RUPA a partnership is liable for a partner's unauthorized act even when the claimant had reason to know the act was unauthorized. A defense based on the claimant's knowledge is effective only when the claimant actually knows--is cognitively aware--that the act was unauthorized. This Article argues that this places an unfair burden on innocent partners. It notes that the doctrine of apparent authority rests on the objective theory of contracts and that the approach taken in RUPA is inconsistent with that theory. On a separate but related matter, the Article suggests several technical amendments to the sections of RUPA dealing with constructive notice; the changes would simplify and clarify the language of RUPA.