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Mutual Agency

19 August, 2015 - 15:25

Unless otherwise stated in the partnership agreement, each partner is able to make decisions that are legally binding, not only on the partnership, but also on the other partners. This is known as mutual agency. The only exception involves activities that fall outside the normal activities of the partnership. For example, a partnership formed to sell used cars would not normally include the buying and selling of footwear; in this case, partners would not be legally bound to footwear contracts signed by only one of the partners.