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Which clause clarifies which partner can enter into contracts on behalf of the firm?

Answer and explanation

Correct answer: Clause of rights and duties

A partner’s authority to represent the firm and enter into contracts is part of the rights and duties arrangement. The partnership deed can specify which partner may negotiate, sign or approve contracts, the limits of that authority, and whether consent from other partners is required. This reduces unauthorized commitments and clarifies responsibility when the firm deals with outsiders. Therefore, option A is correct. The colour of goods, customer discounts and warehouse rent may be operational matters, but none of those provisions identifies a partner’s legal or managerial authority to bind the firm through a contract.

Related tags

Rights And DutiesContractual AuthorityPartnership DeedPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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