A Case For The Purchase Of Anesthetic Gas From Sleeping Gas Co Ltd
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ASSIGNMENT 1 Question 1
Are Mary and Frances liable for the purchase of Anesthetic gas from Sleeping Gas Co Ltd?
Are Mary and Frances liable for the purchase of the truck from Dan’s Auto Lot Ltd?
A partnership is not a separate legal entity. Accordingly, outsiders (3rd parties) should contract with the individual partners. Whether the contract entered into by a single partner is binding on the firm depends on law of agency. According to s5 where there is an actual (express or implied) authority, a partner could have the power to act as an agent on behalf of the other partners for the purpose of the partnership business (Harris et al 2011). Once a partner does any corporate transaction which relates to the kind…show more content… Thus each of the partners is bound by the other’s act assuming that a transaction falls within the express, implied or ostensible authority as stated in s6(1). In respect to s7 an agent should have special express authority to bind the other partners and the firms for the acts lying outside of the partnership business (Allen, 2002).
Second important element shown in s5 (1) is whereas a partner acts beyond his or her express authority, A 3rd party can still succeed in claiming the partnership liable if it is possible to reveals that the concerned transaction falls within the ordinary implied authority of a partner of a firm which usually processes that type of business unless the other partners prove that the 3rd party was aware that there is no authority or lack of authority of the partner whom he or she entered into the contract (Harris et al, 2011).Section 8 claims that any limitation of authority in internal agreements between partners would only affect 3rd party rights only if the 3rd party or outsider was aware of that limitation of the agreement (Gibson & Fraser, 2014). This application had been used in Mercantile Credit Ltd v Garrod  3 All ER 1103, where court held that the