Authority and liability

In this lesson

1. 0:00 Partnership authority and liability overview
2. 0:26 Express authority in partnership agreements
3. 1:15 Implied authority within business scope
4. 2:54 Apparent authority and third party belief
5. 5:04 Joint and several liability explained
6. 6:15 Authority limits and partner spending
7. 7:00 New and retiring partner liability
8. 7:24 Retirement notice and creditor protection
9. 8:29 Novation and releasing retiring partners

About this lesson

Understanding these distinctions is essential for the Corporate and Business Law paper, as exam questions frequently test your ability to determine whether partners are bound by contracts and when liability extends to all partners or just individuals. The lesson covers the key principle of joint and several liability—partners are generally liable together for contracts within the firm's usual business scope. You'll see how this works through real case examples, including when retiring partners can be held liable if they haven't properly notified creditors and the London Gazette. The session also explains important protections: new partners are only liable from their joining date, and retiring partners can use novation to formally transfer liability for existing debts, provided creditors agree. By the end, you'll understand the practical steps partners must take to protect themselves, particularly when leaving a partnership. This includes giving notice to existing creditors, advertising retirement in the London Gazette as a matter of public record, and securing creditor agreement before stepping away from ongoing obligations. These concepts directly support exam success and real-world partnership governance.

Duration: 10m