Question

You are assisting in the negotiation and preparation of a contract for the purchase and sale of real property. The seller of the property is a partnership composed of two partners. The partners are XYZ Realty Company, also a Texas corporation, and ABC Realty Company, also a Texas corporation. You have been asked to obtain proper documentation to demonstrate that the seller has the authority to enter into the contract and will be bound by the terms of the contract. What documentation will you need?

Answer 1

While documentation, I need to remember that a general partnership formed under Uniform Partnership Act has the power to enter into contracts for sale and purchase of property. Both the partners, XYZ Realty Company and ABC Realty Company should consent to the contracts entered by the partnership unless there is no managing partner designated by the agreement. I need to review the partnership agreement properly to determine the type of authority possessed by both XYZ and ABC Companies while negotiating if both are not negotiating or signing the contract. If there is limited partnership formed under Uniform Limited partnership Act, the general partner would be authorized to act on behalf of the partnership and to buy and sell the property without limited partner’s consent. If the partnership agreement limits the powers of general partner, the authority of general partners to sign the documents is determined by the partnership agreement and I need to document limited partner’s consent also to sell all the assets of the limited partnership.