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Business Environment and Law-Performance And Discharge Of Contracts

Rights, Duties and Liabilities of Partners-Performance And Discharge Of Contracts

   Posted On :  08.05.2018 12:34 am

Rights, Duties and Liabilities of Partners-Performance And Discharge Of Contracts

Rights, Duties and Liabilities of Partners
 
 

Rights


Right to take part in the conduct of business
Right to be consulted
Right of access to the books
Right to share profits
Right to interest on capital
Right to interest on advances
Right to indemnity
Right to act prudently in emergency
Right to give consent for admission of a new partner
Right to retire
Right to carry on competing business after retirement.

Duties


A. Qualifying

To attend his duties diligently
To work without remuneration
To contribute to losses
To indemnify for willful neglect
To use firm’s a property exclusively for the firm
To account for private profits [Sec.16(a)]

B. Others


Duty to carry on business for the common advantage
To indemnify for loss caused by fraud
To give full information
To render true accounts
To be just and faithful

Liabilities


Liability of partner for acts of the firm: Every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner
Liability of the firm for wrongful acts of the partner: Where, by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injury is caused to any third party, or any penalty is incurred, the firm is liable therefore to the same extent as the partner (Section 26).
Liability of the firm for misapplication by partners: (i) When a partner acting within his apparent authority receives money or property from a third party and misapplies it, or (ii) A firm in the course of its business receives money or property from a third party, and the money or property is misapplied by any of the partners while it is in the custody of the firm, the firm is liable to make good the loss (Sec. 27).
Liability for the loss caused by his own fraud
Liability for the loss caused by his own willful neglect.
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