This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The scope of a partnership is primarily a question of the intention of the partners. There is no restriction on the exercise of such powers as it chooses at any time to exercise, except such prohibitions on illegal, immoral or fraudulent conduct as apply equally to individuals.1 A partnership may itself be a member of another firm if the partners of the constituent firm consent thereto.2 If it appears that all the partners have either authorized or ratified the contract, no further question as to its validity ordinarily remains. The cases where the question of the validity of partnership contracts arises is where one partner has made the contract without specific authority from his co-partners. As to their implied scope partnerships may he divided into the classes of the non-trading and the trading. Some powers can be exercised by partners in partnership of either type. Thus a partner may retain an attorney to protect the interests of the firm.3
11 Sarmiento v. The Catharine C, 110 Mich. 120; 67 N. W. 1085.
12 Groves v. Wilson, 168 Mass. 370; 47 N. E. 100.
1 Wadsworth v. Duncan, 164 111. 360; 45 N. E. 132; Hodgson v. Baldwin, 65 111. 532; Kenyon v. Williams, 19 Ind. 44; Edwards v. Gasoline Works, 168 Mass. 564; 38 L. R. A. 791; 47 N. E. 502; Farnum v. Patch, 60 N. H. 294; 49 Am. Rep. 313; Carter v. McClure, 98 Tenn. 109; 60 Am. St. Rep. 842; 36 L. R. A. 282; 38 S. W. 585; Willis v. Chapman, 68 Vt. 459; 35 Atl. 459.
1 In this respect it differs sharply from corporations. See Sec. 1067 et seq.
2 Willson v. Morse, 117 Ia. 581; 91 N. W. 823; Meador v. Hughes, 14 Bush (Ky.) 652; McLaughlin v. Mulloy, 14 Utah 490; 47 Pac. 1031; Commercial Bank v. Miller, 96 Va. 357; 31 S. E. 812.