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Partner’s authority in emergency

Sometimes, the firm is held liable even if the partner’s act is not within the scope of his authority. Such cases arise when there is an emergency to do a particular act. According to Sec. 21, a partner has an authority in emergency; to do all such acts for the purpose of protecting the firm from the loss as would be done by a person of ordinary prudence, in his own case in the same situation. The firm will be liable only if the following conditions are satisfied:
  • The act must be done in an emergency
  • The act must be done to protect the firm from the loss threatened by the emergency
  • The act must be reasonable in the circumstances

A partner may sell goods which were meant for a particular customer in an emergency, to some other person. The emergency might have been that there was a danger of the goods getting spoilt. The firm shall be liable for this act and not the partner personally.


Note: The implied authorities of a partner can be extended or restricted only with the consent of all the partners. Any one or even a majority of the partners cannot restrict or extend the implied authority.

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