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explain the concept of mutal agency in partnership with suitable explample |
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Answer» Mutual agency :-- the definition of partnership highlights that the business is carried out by all or any one acting for all . In the partnership every member is agent as well as principle. He is agent because he represent them and all the members binds by his act . And he can also be the principle because he bound by the act of other members in the partnership form of business organization. . Mutual agency is the right of all partners to represent the company\'s normal business operations and the authority to bind it to mutual contracts and agreements. In leman\'s terms, it is the authority given to a person doing business on behalf of the company, usually a business owner or partner. Mutual agency is the legal relationship between partners in a partnership where each partner has authorization powers and the ability to enter the partnership into business contracts. In other words, each partner in the partnership is an agent in the business and the authority to make business decisions that commit or bind the partnership, as a whole, to a business agreement with a third party or entity.Mutual agency only exists for partners acting within the scope of normal business operations and dealings. For example, a retailer apparel partner with agency would not be able to contract the other partners into a deal to purchase a piece of investment real estate because this would be outside the normal operations of the business.One of the retail partners can, on the other hand, purchase goods from a vendor and require the partnership pay for the goods. This transaction is within the normal course of operations of the business. |
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