Practice question
A partner acts in the usual way of the firm's business, but actually lacks authority for that transaction. The counterparty knows that lack of authority. Under Article 1818, does the usual-business appearance alone bind the firm?
- Yes, knowledge never matters.
- No; the stated lack of authority and counterparty knowledge fall within the exception.
- Yes, every partner's act always binds the firm.
- Yes, every private transaction is usual business.
- Yes, the partner can erase the counterparty's knowledge.
Legal references
- Civil Code, Articles1786–1811 and1816–1824: https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html
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