Mutual agency definition

Mutual agency means that every partner has a dual role – that of a principal and of an agent. Every partner is an agent of the other partners and can bind other partners by his acts done on behalf of the firm in all matters that are within the scope and object of the partnership. Similarly, every agent is also the principal for the other partners in the firm and in turn, is bound by their acts. Section 18 stresses the necessity of mutual agency again and states that a partner is an agent of the firm. The act of the partner is binding on the firm just like an act of an agent is binding upon the principal. The foundation or basis of the law of partnership is agency. The law of partnership is undoubtedly, a branch of the law of the principal and agent. Every partner is both – an agent and principal for the other partners. For example, a notice to partner serves as a notice to the firm. The acts of a partner during the ordinary course of business bind the other partners and they are liable for the same. Subject to limitations under Section 20 of the Act, one partner can always bind the other partner(s) in any matter that falls within the scope of partnership. Partners are not agents for each other outside of the firm or for other purposes. In the above case, House of Lords clarified that the sharing of profits only created a rebuttable presumption of partnership. Lord Cranworth elaborated further “Where two or more persons are engaged as partners in any ordinary trade, each of them has an implied authority from the other to bind all by contracts entered into according to the usual course of business in that trade. The public have a right to assume that every partner has authority from his co-partner to bind the whole firm in contracts made according to the ordinary usages of trade.” Whether there was a partnership or not is a mixed question of fact and law, depending upon the varying circumstances in different cases.
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Examples of Mutual agency in a sentence

  • Mutual agency implies that each partner in a partnership is a fully authorized agent of the partnership.

Related to Mutual agency

  • Nodal Agency means CTU, which shall execute and implement the Transmission Service Agreement (TSA);

  • Local agency means a city, county, or city and county, whether general law or chartered.

  • Dual agency means an agency relationship in which a

  • Educational Agency As defined in Education Law 2-d, a school district, board of cooperative educational services, school, charter school, or the New York State Education Department.

  • Central Agency means the agency operating the National Load Dispatch Centre or such other agency as the Central Commission may designate from time to time;