Which of the following is true about the authority of a partner in a partnership?

In a partnership, any partner generally possesses authority to bind the partnership in ordinary business matters, which is a fundamental principle of agency law as it applies to partnerships. This means that when partners engage in transactions that are within the scope of the partnership's business, they have the power to enter into contracts, make decisions, and act on behalf of the partnership without needing prior consent from the other partners.

This authority is rooted in the idea that each partner is considered an agent of the partnership, and their actions within the scope of partnership business can create binding obligations on the partnership. The only exception to this rule occurs in situations where a specific limitation on a partner’s authority has been communicated to third parties or has been established through the partnership agreement, which is not the case in typical ordinary business dealings.

Understanding this principle is critical for recognizing the autonomy of partners in conducting day-to-day operations and the importance of how these actions can impact the partnership as a whole. This reflects the collaborative nature of partnerships and the reliance on mutual trust among partners to manage the business effectively.