Unformatted text preview: Court of Appeals, Plaintiff wins, Affirmed Reason: Even though the partnership had given the general partner had his actual authority restricted by the agreement, the general partner possesses the apparent authority to make a purchase for the partnership. It is not the job of the bank to investigate whether the partner did indeed have the actual authority to place this order. The general partner was carrying on the business the way that the business should have been run. The partnership did not send anything to the bank in writing or make it known to the bank that the general partner could not make these purchases, therefore, they are liable. Rule of Law: General Partners have the apparent authority to bind the partner to bind the partnership to an agreement in an ordinary course of business. As a result of the partnership not making it aware to the bank, the bank was not negligent in granting the loan....
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- Spring '10
- Business Law, Corporation, Types of business entity, Types of companies