Liability for Actions of Partners

July 14, 2023

The doctrine of mutual agency also implies that partners are jointly and severally liable for the actions and obligations of other partners. This means that if a partner enters into a contract or creates a legal obligation on behalf of the partnership, all partners are equally responsible for fulfilling that obligation or bearing the consequences.
Limits on Authority: While partners have the authority to bind the firm, there are certain limits to this authority. Partners cannot act outside the scope of the partnership’s business, engage in activities that are prohibited by the partnership agreement, or act in a manner that is fraudulent or illegal.
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