Question

Which of these acts falls outside the implied authority?

• A. Purchase goods dealt or used by the firm on behalf of the firm
• B. Sale of the goods of the firm
• C. Receiving payments of debts due to the firm and issuing receipt for it
• D. Withdraw any suit or proceeding field on behalf of the firm

Answer 1

The correct option is D Withdraw any suit or proceeding field on behalf of 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.