Under section 19 of the Indian Partnership Act, 1932, which act is outside the implied authority of a partner in a trading firm? Assume there is no contrary trade usage and that routine trading acts…
Question and options
Under section 19 of the Indian Partnership Act, 1932, which act is outside the implied authority of a partner in a trading firm? Assume there is no contrary trade usage and that routine trading acts are done in the ordinary course of business.
Pledging or selling the firm's stock-in-trade
Admitting liability in a suit against the firm
Borrowing money for the firm's business
Hiring staff for the firm's business
Answer and explanation
Section 19(1) generally binds the firm when a partner acts in the usual way for that kind of business. Section 19(2)(e) expressly excludes admitting liability in a suit or proceeding against the firm in the absence of a contrary trade usage. Section 23 separately addresses the evidentiary effect of a partner's ordinary-course admissions or representations about the firm's affairs.
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