Blankenship v. Smalley

Under ORS 67.040, a business partner’s actions will be binding on his partner unless the other party had actual knowledge or notice of that partner’s lack of authority to bind his partner.

Mrs. Smalley appealed the district court’s award of summary judgment in favor of Blankenship. Blankenship alleged that the parties executed a written contract in June of 2009 for the Smalleys to purchase her shoe business and which the Smalleys subsequently breached when they failed to make the required payments. Blankenship argued that that Smalleys had formed a partnership and had the ability to bind each other, and that she reasonably relied on Mr. Smalley’s representations that he was authorized to execute the June agreement. On appeal, Mrs. Smalley raised three assignments of error. After the Court of Appeals dismissed the first and third assignments due to failure to preserve, it dismissed the second assignment on the merits, holding that Blankenship did not have actual notice or knowledge of Mr. Smalley’s lack of authorization and affirmed the district court’s award of summary judgment. Affirmed.