Any misapplication of a third partys money or

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• Any misapplication of a third party’s money or property by the firm or a partner acting within its apparent authority – s. 11. • Retired partners and the estate of dead partners will still be liable for the firm’s outstanding debts if these were incurred while they were still partners. Retired partners may also be liable for debts incurred after their retirement unless notice of the retirement had been given to the creditors or unless there is an agreement discharging him therefrom – s. 17(2)(3). However, a new partner will not be liable for any liabilities of the firm incurred before he became a partner – s. 17(1). The estate of a dead, bankrupt or retired partner will also not be liable for liabilities incurred after the death, bankruptcy or retirement, provided this was notified to the public or persons concerned – s. 36(3). 18.3.5 LIABILITY FOR HOLDING OUT AS A PARTNER If a person, in writing, orally or by conduct, holds himself out, or allows himself to be held out as a partner and because of that a third party gives credit to the firm, that person would be liable to the third party for the money. However, the continued use of a firm’s name after the death or retirement of a partner shall not make the dead partner’s estate liable for the firm’s new debts – s. 14. Download free eBooks at bookboon.com
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BUSINESS ORGANISATIONS AND AGENCY 342 PARTNERSHIPS Tower Cabinet Co Ltd v Ingram [1949] 1 All ER 1033 Ingram was in a partnership with C but subsequently retired, with C promising to inform the firm’s customers of Ingram’s retirement. C later ordered goods from the claimant (which had not previously dealt with the firm) with old notepaper which had the name of Ingram as a partner. He failed to pay for the goods. The claimant sued Ingram for the money on the ground that he held himself out as a partner in the firm. It was held that Ingram was not liable and did not hold himself out as a partner. A similar decision was reached in UCB Home Loans Corp Ltd v Soni and Soni & Co [2013] EWCA Civ 62. S and K were partners in a firm of solicitors, but S also had a sole practice. S borrowed £2.5 million from the claimant bank in exchange for the bogus mortgage of his five houses. Although the transactions were in his personal capacity, he falsely claimed to be acting on behalf of the partnership and forged the signature of K on the relevant documents. S defaulted on the loans. It was held by the Court of Appeal that K was not liable since he was not party to S’s representations to the Bank and did not hold S out as representing him or their firm. 18.3.6 PARTNERS AS AGENTS Every general partner is an agent of the firm and can bind it and the other partners in respect of: Any act done in the normal cause of the firm’s usual business, unless the particular partner had no such right under the agreement and the third party knows it or does not believe or know him to be a partner ( s. 5 PA 1890 ) • Any act or instrument relating to the business of the firm executed by a partner
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