In the name or on behalf of the firm s 6 pa 1890 thus

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in the name or on behalf of the firm ( s. 6 PA 1890 ) Thus, the authority of a general partner to bind others and the firm is both actual and apparent. Actual authority arises from the partnership contract, while apparent authority arises from the fact of the partnership and the powers incidental thereto. The apparent authority is irrespective of contract and therefore subsists even if the partnership contract forbids the partners from doing the thing complained about unless this fact has been brought to the notice of the third party. Download free eBooks at bookboon.com
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BUSINESS ORGANISATIONS AND AGENCY PARTNERSHIPS 343 In Mercantile Credit Co v Garrod [1962] 3 All ER 1103 , a partnership involved car repairs and letting of lock-up garages. The partnership agreement forbade the partners from buying and selling cars. In breach of this agreement, the managing partner sold a car to the claimant. The claimant sued the sleeping partner to recover the money. The sleeping partner denied liability on the ground that the sale was done outside the scope of the partnership and in breach of the partnership agreement. It was held that the transaction was within the scope of the partnership business since it appeared to outsiders as such; and that it did not matter that the sale was in breach of the partnership agreement. A person dealing with a partnership after its membership has changed is entitled to regard all apparent members of the firm as still members unless he has notice of the change in membership or the change has been properly advertised – s. 36(1). However, a partner cannot bind the firm or the other partners: • If he goes outside the scope of the partnership business or undertakes a personal transaction. If the partners have agreed that a particular partner would not be able to bind the firm, provided the third party had notice of this agreement – s. 8. Download free eBooks at bookboon.com Click on the ad to read more We will turn your CV into an opportunity of a lifetime Do you like cars? Would you like to be a part of a successful brand? We will appreciate and reward both your enthusiasm and talent. Send us your CV. You will be surprised where it can take you. Send us your CV on
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BUSINESS ORGANISATIONS AND AGENCY 344 PARTNERSHIPS A credit arrangement was undertaken by a partner in a private capacity or in relation to something unconnected to the ordinary business of the firm – s. 7. In JJ Coughlan Ltd v Ruparelia and others [2003] All ER 344 , one of the partners in a firm of solicitors, acting in concert with some conmen, defrauded the claimant of $500,000 under a false promise to give it a return of $2.5million on a short term investment. It was held that the firm was not liable under sections 5 and 10 of the PA 1890 since the extra-ordinary scheme by the partner was not in the normal scope of solicitors’ business.
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