Abstract

This chapter sets out the vicarious liability of partners for the various forms of partnership liability to third parties. The liability for contracts is based on the concepts of agency and the authority of the partner(s) making the contract, in particular the scope of the implied or usual authority of a partner to bind the other partners. The exception to the undisclosed principal rule is carefully examined. The vicarious liability for torts and crimes committed by a partner is examined, including the apparent paradox of the non-existent legal person of the firm being subject to prosecution. The liability for breaches of equitable liabilities relating to misapplications by a partner is synthesised, including knowing receipt and dishonest assistance in a breach of trust. Then the chapter considers the nature of such liabilities and finally, the effect of a change of partners on such liabilities on both the outgoing and incoming partners.

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