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?

    <p>When partners act jointly in entering into a contract (A)</p> Signup and view all the answers

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

    <p>Partners appear to authorize one partner according to apparent authority (C)</p> Signup and view all the answers

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

    <p>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 (B)</p> Signup and view all the answers

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

    <p>To determine if partners have exceeded their actual authority (D)</p> Signup and view all the answers

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

    <p>All partners are bound and personally liable (A)</p> Signup and view all the answers

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

    <p>If the partner acted without actual authority (C)</p> Signup and view all the answers

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

    <p>All partners will be personally liable if one partner has apparent authority (D)</p> Signup and view all the answers

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