EXTERNAL RELATIONS

 Requirement 1: Agreement must be valid  Requirement 2: Representative must be authorised  Requirement 3:  Agreement concluded in name or on behalf of the partnership

 Usual requirements for valid contract Contractual capacity Consensus Lawfulness Performance possible Formalities

 Partnership cannot conclude contract on its own  Should be represented by another party (even third party)  Representative must have the necessary authority

 Partnership will be bound :  Representative had necessary authority  Transaction within scope of mutual mandate  Operation of estoppel  Ratification

 Authority = power to perform binding legal acts on behalf of another  Orally / in writing / tacitly e.g. through conduct  Partners can confer authority on partners, non- partners and employees

 Naturalia of p/s  Mutua praepositio = every partner has the power to bind p/s within the scope of the p/s business  Partners can alter it eg limiting powerof representation  Scope of p/s business = factual question  nature and purpose of p/s business + general commercial usuage (property development, racehorses )  Bona fide third must proof contract fell within the ordinary scope of the p/s business = need NOT proof partner had necessary power (authority)  Explicit authority for contracts outside authority

 Remedy or defence to person injured by deceit  Deceived stops the deceiver from relying on true state of affairs  Deception is deemed to be true state of affair  Eg. partner without authority within scope of p/s business + partners falsely act as if p/s has authority = p/s bound by act and cannot rely on lack of authority  Requirements: Unlawful representation Culpable representation by deceiver Deceived relied on it To deceived’s deteriment /loss

 Partner without authority conclude contract on behalf of p/s = co-partners accept, can ratify agreement  Ratification = retroactive effect  Contract valid as if partner had authority at time when contract was concluded

 Common law: Partner must have authority + conclude contract in the name or on behalf of p/s  Contract concluded with person in personal capacity  May be breach of good faith Whose rights and duties?  Look at intention of parties even if partnership’s name is not mentioned in agreement  What if representative does not disclose representation?

 Intention not conclusive if representative did NOT disclose that he is acting on behalf of principal (p/s)  General rule of law of agency p/s  bound because third party contracted with representative in personal capacity  Cullinan-saak  Eng law doctrine  If representative contracted in own name + did not disclose he is representative of principal  contract between third party and principal  contract between third party and representative  Only of there is only ONE principal  Third party choice to hold either principal or representative liable

 Other partners vicarious liable for delict committed by other partner if i) within scope of p/s business; or ii) within scope of authority  Vicarious liability = by virtue of special legal relationship

 P/s not legal person = cannot commit crime, be prosecuted or punished  Partners can commit crime.  S 332(7) of the Criminal Procedure Act: partner commits crime in carrying on of the p/s business or in furthering the interest of the ps/ = ALL other partners deemed guilty of the crime /offence as well  Except if can proof that  i) did not take part commission of offence and  ii) could not have prevented it  Constitutional? Right to be preseumed innocent

 Common law  Rule 14 of the Supreme Court Rules + Rule 54 of the Magistrate’s Court Rules = p/s sue or be sued in own name  If a partner’s name is not mentioned: not a defense for partnership claim only against partnership estate  Ask for names of partners + residential addresses