Partnership Essay

700 Words3 Pages
This question deals with the legal personality of liability of partnership covered by the Partnership Act. The key issues are whether or not Adam is a partner of the partnership and what is the role of Adam in this clinic. What’s more, the liability of partnership also is the important issue in this question. Partnership is the relation which subsists between persons carrying on a business in common with a view of profit. S7(1), partnership Act 1895(WA) An outsider can assume the a particular partner with whom they are dealing has the authority held out by the principal. A partnership is not a separate legal entity so outsider must contract with individual partners because of unlimited liability. P125 Partners are jointly liable for contracts made by or on behalf of the firm. P125 A partner usually has implied powers to bind the firm in all transactions the are necessary to carry on the business in the usual way such as selling assets of partnership, buying goods of the kind usually employed in the firm’s business account of the partnership,contract debts, give securities for those debts and pay debts and receive payment of debts. P123 Partners are liable for the debts of the business and personal liability is unlimited for each. Every partner may take part in the management of the business and limited partner may invest but not be directly involved in management and are liable only to the extent of their investments. Apparent authority arises when a principal, by either words or actions, causes a third party to believe that an agent has no express or implied authority to act with regard to the particular matter at hand. The outsider must not know or suspect that the partner was exceeding his authority and must have known or at least must believe that the person with whom he was dealing was a partner. Even if a particular transaction falls outside the

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