10 Questions
What is the basis for the power to 'bind' the partnership?
Principles of the law of agency
In the context of partnership authority, what does 'actual authority' refer to?
Partner actions actually authorised by the partnership
What is 'apparent authority' in the context of partnership agreements?
Actions that are not actually authorised, but appear authorized to a third party
When can partners bind the partnership in a contract according to actual authority?
When partners act jointly in entering into a contract
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
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
What does the Partnership Act s.5 provide a test for?
To determine if partners have exceeded their actual authority
In terms of liability, which statement is true about partners who act without actual or apparent authority?
All partners are bound and personally liable
Under what circumstances can partners make a claim against another partner for loss incurred?
If the partner acted without actual authority
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
Learn about the authority of partners in a partnership agreement to make contracts collectively or individually on behalf of the partnership, and the liabilities associated with such actions. Explore scenarios where partners may seek to deny liability for contracts made by another partner.
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