2006 Nebraska Revised Statutes - § 67-309 — Partner as agent; scope of agency.

Section 67-309
Partner as agent; scope of agency.

(1) Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority.

(2) An act of a partner which is not apparently for the carrying on of the business of the partnership in the usual way does not bind the partnership unless authorized by the other partners.

(3) Unless authorized by the other partners or unless they have abandoned the business, one or more but less than all the partners have no authority to:

(a) Assign the partnership property in trust for creditors or on the assignee's promise to pay the debts of the partnership,

(b) Dispose of the goodwill of the business,

(c) Do any other act which would make it impossible to carry on the ordinary business of a partnership,

(d) Confess a judgment,

(e) Submit a partnership claim or liability to arbitration or reference.

(4) No act of a partner in contravention of a restriction on authority shall bind the partnership to persons having knowledge of the restriction.

Source:

Laws 1943, c. 143, § 9, p. 489

Termination date January 1, 2001

Annotations:

The restrictive provision in the partnership agreement was not a restriction on the authority of a partner to bind the other partner to a particular transaction. It was an attempt to negate the authority of a partner to bind the other partner in any transaction. It was contrary to law and invalid as to creditors, including those with notice. Security State Bank v. Gugelman, 230 Neb. 842, 434 N.W.2d 290 (1989).

A letter agreement signed by only one general partner, not executed in the course of carrying out the partnership's business, and having the effect of modifying the partnership agreement, did not bind the partnership or other members of it. Waite v. Salestrom, 206 Neb. 578, 294 N.W.2d 338 (1980).

~Reissue Revised Statutes of Nebraska