Partnership

It is important to differential the actual authority and apparent authority. Actual authority arises where the principal's words or conduct reasonably cause the agent to believe that he or she has been authorized to act. Apparent or ostensible authority exists where the principal's words or conduct would lead a reasonable person in the third party's position to believe that the agent was authorized to act, even if the principal and the purported agent had never discussed such a relationship.
Apparent authority of partner in a firm has mention in Section 7 Partnership Act 1961. It provides that Every partner is an agent of the firm and his other partners for the purpose of the business of the partnership; and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he is a member bind the firm and his partners, unless the partner so acting has in fact no authority to act for the firm in the particular matter, and the person with whom he is dealing either knows that he has no authority or does not know or believe him to be a partner.

That has four conditions to determine whether a partner has the apparent authority. The first condition is where the act done must be of the type of business that is carried out by the firm. Second condition is the act will bind the firm if it is done in usual and ordinary manner. If not, the act would not bind the firm or other partners. Third condition is the third party know or believe that the partner has authority or power to act and fourth condition is third parties enter into a transaction and he now that the person does not have authority to act, the firm will not be liable.
As a whole, there are four conditions to determine the apparent authority of partners. The four conditions will be binding on the firm. However, the apparent authority is used to determine the position of the partner as an agent of the company.