Question

Which of the following act falls outside the implied authority?

• A. Appointment of employees to carry on the firm's business
• B. Admit any liability in a suit or proceedings against the firm
• C. Pledging goods of the firm as security
• D. Borrowing money on behalf of the firm

Answer 1

Answer: (B)

Admit any liability in a suit or proceedings against the firm

Implied Authority is the authority that is not conferred by the mutual agreement between the partners and which is not bind on other partners. This authority is acted on the ordinary course of business and the firm is bound by such authority when the act is done in a normal way of carrying on the firm's business. These authority is also known as ostensible authority or apparent authority.