Partnerships Act

Effect of s. 5 of the Partnership Act 1890 (U.K.) (similar to s. 6 of the Partnerships Act (Ontario)) (12-05)

The dual agency concept: The reference to each partner being “the agent of the firm and his other partners” requires explanation. At first sight the reference to the firm appears to be mere surplusage, since that expression is merely shorthand for all the partners, such, indeed, appears to have been the view of Park J in Major v Brodie [f.n. 23: [1998] S.T.C. 491, 504c-e]. However, in the current editor’s view these words may serve a function and establish what might be styled the pure form of mutual agency, under which each partner acts in dual capacity, i.e. as agent for the partners collectively [f.n. 24: It is, at the same time, recognised that this necessarily entails the partner also acting as his own agent, which is something of a contradiction in terms. This point was not adverted to in Major v. Brodie, supra.] and as agent for each of the other partners in their individual or separate capacities. This is consistent with the dual nature of a partner’s liability under the Partnership Act 1890 and, to an extent, the treatment of a partnership debt under the insolvency laws, but it is fair to say that the concept does not appear to have been recognised by Lord Lindley himself.