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Sir can you please explain me the following phrase
”Implied authority of partner can only be withdrawn if an express clause is stated along with third party notification for restriction on implied authority.”A partner in a partnership has the implied authority to enter into contracts for ANY business on behalf of the partnership in the course of the firm’s business … and a third party is able to rely upon that partner having that authority
The only way to restrict the extent of a partner’s authority is to exclude that authority by express clause within the partnership agreement
But a partnership agreement is not a public document so a third party that enters into a contract with a partner whose authority is restricted is able to assume that the partner has full authority
Therefore the only effective way to restrain that partner is by notification to the public that our partner does NOT have authority beyond … whatever is the outer limit that we choose as the limitation
OK?
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