In which circumstances is a partnership liable for a partner's acts performed without authority?

The partnership is liable for a partner's acts performed without authority if the act appears to carry on partnership business. This principle is grounded in the doctrine of apparent authority, which holds that if a partner acts in a way that seems to be in the regular course of business, the partnership may be bound by that action, even if that partner did not have the explicit authority to take such action.

This protection is designed to provide stability and assurance to third parties dealing with partnerships. It promotes trust in business transactions by allowing those outside the partnership to assume that partners can act on behalf of the partnership in matters related to its business, fostering seamless interactions.

For example, if a partner enters into a contract with a third party that appears to be in line with the customary business operations of the partnership, the partnership may still be responsible for that contract even if the partner overstepped their authority.

This liability does not hinge on whether the partner acted for personal gain; instead, it is about the perception of the act concerning partnership business. Hence, the partnership's liability is more nuanced than blanket personal liability or the idea that every action is disregarded based on authority.