Identify which of the following is not related to the concept of “MUTUAL AGENCY”?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Each partner carrying on the business is the principal only.
Mutual agency means that every partner acts for the firm and for all the other partners at the same time. So each partner is both a principal and an agent: he is bound by what the others do, and he binds them by what he does in the business.
Option (1) The business of a partnership concern may be carried on by all the partners or any of them acting for all. — Part of mutual agency. This is how the Act describes the idea: any partner may run the business on behalf of all.
Option (2) One partner can bind other partners by his acts and also is bound by the acts of other partners with regard to the business of the firm. — Part of mutual agency. Binding the others makes him their agent; being bound by them makes him a principal.
Option (3) This statement has two important implications. ... — Part of mutual agency. Every partner may take part in the conduct of the business, and a relationship of mutual agency exists among all of them.
Option (4) calls a partner the principal only. The recognised sentence says “the principal as well as the agent for all the other partners”; with the agency part dropped, the statement no longer describes mutual agency, so it is the odd one out. Half a sentence can change the whole meaning, so read each option to its last word.
NCERT (2026-27 edition): |