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Implied Authority





Implied authority Q. What are implied authorities of a partner? What matters have been excluded specically from such authorities by the act. 1. Introduction: Under partnership act act 1932 every partner has right right to takes part part in management of  business of the rm. Business is carried on by all the partners or any of them acting for all the partners. The partner have to eercise their authorities in order to conduct the business. The authority of a partner to act be epress epress or implied. 2. Implied authority: !here there is no epress agreement" the act of a partner #hich is done to carry on in the usual #ay" business of the kind carried on by the rm binds the rm. $t is implied authority. authority. 3. orm of authority %uthority may be& !i" #xpress or !ii" Implied $. %onditions of implied authority: 'onditions of implied authority are as under. !a"%onditions on behalf of rm: %ct done by a partner is on behalf of a rm. !b"&ct done as partner: %ct done on behalf of rm is done by person as a partner of rm. !c" 'se the name of rm:  The act is done done in the name of of the rm. !d"(usiness ob)ects: %ct done is for business ob(ects a rm. !e"*o carry on business:  The act done relates relates to the normal normal business business of the rm. rm. +. Implied authority of a partner: % partner can do the follo#ing acts under implied authority. !I" (orro,in- money: % partner can borro# money on the credit of the rm %ase la, 1/0 %% 2+$1 $t #as held that one partner can borro# on credit on the rm if the rm is trading rms" and no duty is cast upon the person advancing money to make any further en)uiry. !II" urchasin- of -oods: *e can purchase goods for the rm on credit if it is necessary to carry on the business. %ase la, 1/ %% 1/$ $t #as held that a partner had no implied authority to bind his rm by opening a bank account in his o#n name. !III" %ontracts: *e can make contract on behalf of rm. %ase la, . . 4 1 ah. $+2 $t #as held that #here a partner enter into contract on behalf of the rm and his partner do not ob(ect to the contract" the opposite party can not say that the contract #as entered into by the partner of the rm. !I5" *o sale property of rm: *e can sale the goods of the rm" +moveable, !5" 6rantin- the receipt: *e can issue receipt on behalf of a rm. !5I" *o pled-e: *e can pledge property of rm for loan. !5II" *o receive money: *e can receive payment on behalf of rm. !5III" e-al services: *e can engage solicitor to defend an action against the rm. !I7" 8ettlement of accounts: *e can settle accounts #ith the persons dealing #ith the rm. -. &cts outside implied authority: % partner can not do the follo#ing acts. !I" 8ubmit a dispute to arbitration: *e cannot submit a dispute relating to the business of the rm for arbitration. !II" (an9 account: *e can not open a bank account on behalf of the rm in his o#n name. !III" %ompromise: *e can not compromise any claim or portion of any claim by the rm. !I5" Withdra,al of suit: *e can not #ithdra# any suit led by the rm. !5" &dmit any liability: *e cannot admit any liability in a suit against the rm. !5I" &cuire immoveable property: *e cannot ac)uire any immovable property on behalf of rm. !5II" *ransfer of immoveable property: *e can not transfer immovable property belonging to rm. !5III" &-reement: *e cannot enter in to agreement of partnership on behalf of rm. 0. %onclusion: *o conclusion it can be said that; implied authority is an authority of partner ,hich binds the rm by his act under la,. *he scope of implied authority is lin9ed ,ith the nature of business of the rm. & partner