Sec. 949. Liability Of Partners On Contract Without Scope Of Business
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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.
Sec. 949. Liability Of Partners On Contract Without Scope Of Business
If a contract is made by one partner in excess of his authority and no circumstances of estoppel exist, the remaining partners are not liable upon such contract.1 If the firm consists of two partners, one of them can avoid liability on future contracts by giving notice of his dissent to the person with whom such contract is made,2 even if under such contract property was actually received by the firm.3 So if A and B are partners and X before selling to the firm through A on credit is notified by B not to sell on credit, X cannot, after selling on credit, hold B.4 If the firm consists of more than two members a minority cannot revoke the authority of agents previously appointed and empowered to act.5 So employment of an attorney by the majority may bind the firm even as against the active dissent of one partner.6 Still less can a firm be held liable on a contract with an individual member, where it is not shown that such contract was made on behalf of the firm.7
1 Kling v. Tunstall, 109 Ala. 608; 19 So. 907; Seeberger v. Wyman, 108 Ia. 527; 79 N. W. 290.
2 Penn v. Fogler, 182 111. 76; 55 N. E. 192; reversing, 77 111. App. 365; Kincaid v. Paper Co., 63 Kan. 288; 88 Am. St. Rep. 243; 54 L. R. A. 412; 65 Pac. 247.
3 Drucker v. Wellhouse, 82 Ga. 129; 2 L. R. A. 328; 8 S. E. 40.
4 Kincaid v. Paper Co., 63 Kan. 288; 88 Am. St. Rep. 243; 54 L. R. A. 412; 65 Pac. 247; Hutchinson v. Morris, 86 Mo. App. 40.
1 Thompson v. Bank, 111 U. S. 529; Nofsinger v. Goldman, 122 Cal. 609; 55 Pac. 425; Cook v. Slate Co., 36 O. S. 135; 38 Am. Rep. 568;
Peterson v. Armstrong, 24 Utah 96; 66 Pac. 767.
2 Wilcox v. Jackson, 7 Colo. 521; 4 Pac. 966; Knox v. Buffington, 50 Ia. 320; Johnston v. Bernheim, 86 N. C. 339; Yeager v. Wallace, 57 Pa. St. 365.
3 Dawson v. Elrod, 105 Ky. 624; 88 Am. St. Rep. 320; 49 S. W. 465; Monroe v. Conner, 15 Me. 178; 32 Am. Dec. 148.
4 Dawson v. Elrod, 105 Ky. 624; 88 Am. St. Rep. 320; 49 S. W. 465; Monroe v. Conner, 15 Me. 178; 32 Am. Dec. 148.
5 Johnston v. Dutton, 27 Ala. 245; Lerch v. Bard, 177 Pa. St. 197; 35 Atl. 714.
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