Business Studies · Partnership Act
Is a partnership firm running a restaurant bound by Partner A's unauthorized purchase of a commercial oven worth $12,000?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Yes, but only if other partners later ratify the purchase.
- 2Yes, because purchasing an oven falls within the usual scope of a restaurant business, giving Partner A implied authority.✓
- 3No, because the contract price exceeded the limit set in the agreement.
- 4No, because Partner A exceeded his express authority.
Correct answer
Yes, because purchasing an oven falls within the usual scope of a restaurant business, giving Partner A implied authority.
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