There are certain transactions a partner cannot enter into on behalf of the partnership unless he is expressly authorized. A third person who enters into such a transaction does so at the risk that the partner has not been authorized by the other partners to enter into such a transaction.
Cessation of Business
A partner cannot bind the partnership by a contract that would make it impossible for the partnership to conduct its usual business.
Suretyship
A partner has no implied authority to bind the partnership by contracts of surety, guaranty, or indemnity for purposes other than the partnership business. For example, I have no authority to guarantee the debt of my brother in my partnership’s name.
Personal Obligations
A partner cannot satisfy personal obligations or claims of the partnership by interchanging them in any way. For example, a partner cannot satisfy a personal debt to a business by canceling a claim of the partnership against that business.
