Contractual Powers of Partners

Question 1

Actual Authority

Answer 1

Each partner is an agent of the partnership for the purpose of its business. An act of a partner for apparently carrying on the ordinary course of the partnership business binds the partnership unless

(1) the partner had no authority to act in the particular matter and
(2) the person with whom the partner was dealing knew.

Question 2

Partner Management Rights

Answer 2

All partners have equal rights in the management and conduct of the partnership business and no act in contravention of any agreement between the partners may be done rightfully without the consent of all partners.

Question 3

Difference Among Partners

Answer 3

Any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners. If the partners are equally divided, those who forbid the change have their way.

Question 4

Apparent Authority

Answer 4

A partner may have apparent authority if he acted in a manner that was consistent with the partnership’s ordinary course of business (as stated for actual authority)

Question 5

What is Ordinary Business (For Apparent Authority)

Answer 5

Consider

(1) the character of the business
(2) the manner in which it is usual to carry on such a business, and
(3) where the agency has continued for a long time, the manner in which the particular business was carried on

Question 6

Partner Liability by Estoppel

Answer 6

UPA: A partner who make and consents to continued representations that a partnership in fact exists is estopped to deny that a partnership exists to defeat the claim of a creditor. Factors for estoppel:

(1) the would-be partner is being held out as a partner. Look to the actions of the would-be partner
(2) with his consent either expressly or impliedly
(3) the plaintiff relies on this to their detriment