The principle whereby each partner is responsible for the business actions of all other partners when the actions are carried out in the normal course of business is known as:
A) unlimited liability.
B) mutual agency.
C) perpetual life.
D) the rule in Garner versus Murray.

Question

Quizplus · Accepted Answer

Mutual agency is the principle whereby each partner is responsible for the business actions of all other partners when the actions are carried out in the normal course of business. Unlimited liability refers to the legal obligation of a general partner to pay off all debts and liabilities of the partnership. Perpetual life refers to the ongoing existence of the partnership beyond the death or departure of an individual partner. The rule in Garner versus Murray refers to a legal precedent regarding the fiduciary duty of partners in a partnership.

The Principle Whereby Each Partner Is Responsible for the Business