Opinion ID: 1341010
Heading Depth: 1
Heading Rank: 5

Heading: Authority of a Partner to Bind the Partnership to a Contract for the Sale of Real Property

Text: South Carolina Code Ann. § 33-41-310(1) and (2) (1987) states: (1) Every partner is an agent of the partnership for the purpose of its business and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter and the person with whom he is dealing has knowledge of the fact that he has no such authority. (2) An act of a partner which is not apparently for the carrying on of the business of the partnership in the usual way does not bind the partnership unless authorized by the other partners. Section 33-41-310 sets out two ways in which one partner may bind the partnership. First, if a partner has the actual authority to bind the partnership, that partner's acts will bind the partnership. Second, even if a partner lacks the actual authority to bind the partnership, when a partner is apparently carrying on the business of the partnership in the usual way, and the one with whom he is transacting business does not know the partner lacks actual authority, the partner's acts will bind the partnership. The lower court found that St. Clair had the actual authority to bind the partnership to the contracts for the sale of partnership land. The evidence on this point was conflicting, however, the fact finder who heard the testimony is in the best position to judge the demeanor and veracity of the witnesses. McAlister v. Patterson , 278 S.C. 481, 299 S.E. (2d) 322 (1982); Peay v. Peay , 260 S.C. 108, 194 S.E. (2d) 392 (1973). The lower court's findings, despite the contradiction in evidence, are supported by the record. The evidence showed that in the course of this transaction St. Clair made counteroffers, signed a listing agreement and a management agreement on behalf of both of the partners. In the past, St. Clair had alone executed contracts for the sale of partnership property and other partnership contracts on behalf of both partners. As the lower court's finding that St. Clair had the actual authority to bind the partnership is supported by the record, this Court need not reach the question of whether St. Clair's actions might have bound the partnership under an apparent authority theory.