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Partner Authority in Partnership Agreements

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Partner Authority in Partnership Agreements

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Questions and Answers

What is the basis for the power to 'bind' the partnership?

Principles of contract law

Principles of partnership liability

Principles of the law of agency (correct)

Partnership agreement

In the context of partnership authority, what does 'actual authority' refer to?

Partner actions exceeding their authority

Partner actions actually authorised by the partnership (correct)

Partner actions appearing to have been authorised

Partner actions without any authorization

What is 'apparent authority' in the context of partnership agreements?

Actions that have no authorization at all

Actions exceeding the authority granted by the partnership

Actions that are not actually authorised, but appear authorized to a third party (correct)

Actions that all partners must collectively authorize

When can partners bind the partnership in a contract according to actual authority?

When partners act jointly in entering into a contract Signup and view all the answers

How is a partner's authority to represent the partnership implied according to the text?

Partners appear to authorize one partner according to apparent authority Signup and view all the answers

What are the 4 conditions that need to be satisfied for a partner to have apparent authority?

The transaction must relate to the type of business carried on by the partnership, The transaction must be one where you would expect a partner to have authority to act, The other party knows the partner lacks authority, The other party has reason to suspect the partner lacks authority Signup and view all the answers

What does the Partnership Act s.5 provide a test for?

To determine if partners have exceeded their actual authority Signup and view all the answers

In terms of liability, which statement is true about partners who act without actual or apparent authority?

All partners are bound and personally liable Signup and view all the answers

Under what circumstances can partners make a claim against another partner for loss incurred?

If the partner acted without actual authority Signup and view all the answers

What is the effect of apparent authority on the personal liability of partners?

All partners will be personally liable if one partner has apparent authority Signup and view all the answers