Partnerships – Episode 3: Partners’ Agency and Authority

This episode examines how authority operates in general partnerships under the Revised Uniform Partnership Act (RUPA). It explains the dual role of partners as both co-owners and agents, and how that affects the ability of each partner to bind the partnership to transactions. The discussion covers actual and apparent authority, including how authority can arise from the partnership agreement, past practice, or reasonable third-party perceptions. It also addresses limitations on authority, such as the requirement of unanimity for extraordinary acts, and tools like Statements of Partnership Authority that can clarify or restrict a partner’s power. The episode concludes with a look at the risks of unauthorized or self-serving actions by partners, how fiduciary duties intersect with agency law, and what protections exist for both the partnership and third parties.