Question

Which of the following conditions is necessary for the exercise of implied authority?
$1$. The act must relate to the business of the firm.
$2$. The act must be done in the firm's business name.
$3$. The act must be done in the usual way of carrying on the firm's business.
Select the correct answer from the options given.

• A. $1$ & $2$
• B. $2$ & $3$
• C. $1$ & $3$
• D. $1,2$ & $3$

Answer 1

Answer: (D)

$1,2$ & $3$

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 other partners are not liable for the consequences of such a authority. These authority is also known as ostensible authority or apparent authority.