Partner's power to bind co-partners

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Partner's power to bind co-partners

Unread postby Admin » Thu Jan 24, 2013 2:04 pm

Partner's power to bind co-partners:
Each partner who does any act necessary for, or usually done in, carrying on the business of
such a partnership as that of which he is a member binds his co-partners to the same extent as if he were their agent duly appointed for that purpose.
Exception: If it has been agreed between the partners that any restriction shall be placed upon the power of any one of them, no act done in contravention of such agreement shall bind the firm with respect to persons having notice of such agreement.
Illustrations
(a) A and B trade in partnership, A residing in England, and B in Pakistan. A draws a bill of exchange in the name of the firm. B has no notice of the bill, nor, is he at all interested in the transaction. The firm is liable on the bill, provided the holder did not know of the circumstances under which the bill was drawn.
(b) A, being one of a firm of solicitors and attorneys, draws a bill of exchange in the name of the firm without authority. The other partners are not liable on the bill.
(c) A and B carry on business in partnership as bankers. A sum of money is received by A on behalf of the firm. A does not inform B of
such receipt, and afterwards A appropriates the money to his own use. The partnership is liable to make good the money.
(d) A and B are partners. A with the intention of cheating B, goes to a shop and purchases articles on behalf of the firm, such as might be used in the ordinary course of the partnership business and converts them to his own separate use, there being no collusion between him and the seller. The firm is liable for the price of the goods.
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