Babak and Cal are partners in a restaurant business. Their partnership agreement says that Babak does not have authority to sign contracts for supplies for the partnership business. Babak contracted with Doris for the supply of 10 kilos of haddock for the partnership. Which of the following is TRUE?

Question

Quizplus · Accepted Answer

The contract is binding on the partnership unless Doris knew that Babak did not have authority to contract, as third parties can generally rely on the apparent authority of a partner unless they have knowledge of any restrictions.

Babak and Cal Are Partners in a Restaurant Business