Section 19 of IPA : Section 19: Implied Authority Of Partner As Agent Of The Firm

Explanation using Example

Imagine a scenario where Rita, Sanjay, and Anil are partners in a firm that manufactures textiles. One day, Rita orders raw materials from a supplier to produce clothing, which is the usual business of the firm. This order binds the firm as it is within her implied authority under Section 19(1) of the Indian Partnership Act, 1932.

However, if Rita decides to compromise on a debt owed to the firm by accepting a lesser amount without the consent of Sanjay and Anil, she would be acting beyond her implied authority as per Section 19(2)(c), and such an act would not bind the firm unless she was expressly authorized to do so.