A and B run a stationery business in partnership. A uses the firm’s letterhead to buy two bags of wheat…
Under sections 18 and 19 of the Indian Partnership Act, 1932, a partner’s implied authority extends to acts done in the usual way to carry on that kind of business. Section…
Choose your answer
A and B run a stationery business in partnership. A uses the firm’s letterhead to buy two bags of wheat for home use. The firm has neither authorised nor ratified the purchase and has done nothing to indicate to the seller that A could make it for the firm. Is the firm bound to pay for the wheat?
Answer and explanation
Correct answer A
Under sections 18 and 19 of the Indian Partnership Act, 1932, a partner’s implied authority extends to acts done in the usual way to carry on that kind of business.
Section 22 deals with the manner of expressing intent to bind the firm. The letterhead does not make a personal wheat purchase part of the stationery business.
The facts establish no other authority, representation by the firm or ratification, so the firm is not bound.
Option feedback
Option A
A personal wheat purchase is outside the usual course of a stationery business. The facts also rule out other authority or ratification.
Option B
Using the firm’s letterhead can indicate an intent to bind it. Section 22 does not itself confer authority to make the purchase.
Option C
The number of partners does not create a part-payment obligation for a transaction that does not bind the firm.
Option D
A partner can bind the firm through implied authority for acts done in the usual way to carry on its business. This purchase falls outside that authority.
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