What is the outcome when one partner sells property without express authority but claims authority as part of the partnership?

When one partner sells property without express authority but claims authority as part of the partnership, the correct outcome involves the validity of the transaction in relation to third-party interests. In this scenario, the sale can be deemed valid, and title passes to the third party if the third party relied on the apparent authority of the partner.

The concept of apparent authority is crucial here; it allows a partner to bind the partnership in transactions if the third party reasonably believed the partner had the authority to act on behalf of the partnership. This assumption is generally based on the conduct of the partners and the nature of the partnership business. Thus, if a partner acts in a manner that leads a third party to believe they have the authority to sell partnership property, the partnership can be held accountable for that transaction.

This principle protects the interests of third parties and promotes commerce, as it allows individuals to transact without having to verify the internal arrangements of the partnership. Therefore, the third party who engages with the partner in the sale can acquire valid title, even though the partner lacked express authority, leading to the conclusion that title does pass to the third party, making the sale valid despite the internal authority issues within the partnership.