Warren and Spencer are partners in a drilling operation. Warren purchased a drilling rig to be used in the partnership's operations. Is this purchase binding on Spencer even though he was not involved in it? Explain your answer
Yes. Each partner is an agent of the partnership and can bind the partnership by his or her actions as long as the activity is within the scope of the business. Because Warren was acting within the scope of the business when he purchased the drilling rig, the purchase is binding on Spencer. This is the concept of mutual agency.
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