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)the rule in Garner versus Murray.
B)unlimited liability.
C)mutual agency.
D)perpetual life.

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. This means that each partner has the authority to act on behalf of the partnership, and their actions are binding on all other partners. Unlimited liability refers to the partners being personally responsible for all debts and obligations of the partnership. The rule in Garner versus Murray relates to the fiduciary duties of partners, and perpetual life refers to the ability of a partnership to continue even if one or more partners leave or die.

The Principle Whereby Each Partner Is Responsible for the Business