Multiple choice

It is not included in the implied authority of a partner

  1. to buy or sell goods on account

  2. to borrow money for the purposes of the firm

  3. to enter into partnership on behalf of the firm

  4. to engage a lawyer to defend actions against the firm

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Option (1) is incorrect: In the absence of any usage or custom of trade to the contrary, a partner has implied authority to buy or sell goods on account. Option (2) is incorrect: In the absence of any usage or custom of trade to the contrary, a partner has implied authority to borrow money for the purposes of the firm. Option (3) is correct: Under Section 19(2) of the Act, the implied authority of a partner does not empower him to enter into partnership on behalf of the firm. Option (4) is incorrect: In the absence of any usage or custom of trade to the contrary, a partner has implied authority to engage a lawyer to defend actions against the firm.