The Implied Authority of Each Partner to Bind the Other

question 25

Multiple Choice

The implied authority of each partner to bind the other partners in the partnership does not include authority to:

• A)Hire employees.
• B)Buy and sell trading stock.
• C)Give a guarantee on behalf of the partnership.
• D)Write cheques on behalf of the partnership.

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Definitions:

Indemnity

A contractual obligation of one party to compensate the loss incurred by another party.

Contract Law

The body of law that regulates legally binding agreements between parties.

Income-Splitting

A tax strategy used by families or partnerships to divide income amongst members to lower the overall tax liability by utilizing lower tax brackets.

Back Pay

Compensation owed to an employee for a past period, typically due to underpayment or wage disputes.