HOLDING OUT

INTRODUCTION
When a person represent himself
by word or conduct that he is a
partner on the strength of which
that other person relied on the
representation as true. Here he is
liable and cannot later deny the
truth of the representation. Rule of
Estoppel applies here
Re C & M Ashberg
b. PROVISION
S. 16 PA proides
Where a person represents
himself or allow others to
represent him as a partner! that
person will be hold liable as such
proided"
#1$ the representation is gien to
some one
#%$ and that someone relying on
the representation! gies credit to
the firm.
&t must be noted that if "
A represents to ' that he is a
partner to firm (. &f the partners in
the firm ( )new this
representation then they are liable
. 'ut if they don*t hae the
)nowledge then they are not
liable.
#1$ Representation by himsel or by
another person !ith that the irst
persons "no!le#ge that he is a
partner.
#i$the representation can be in writing!
oral or by conduct
#ii$ the word +in a particular firm, in s. 16
does not re-uire the eidence of an
actual firm. &t is immaterial whether the
firm e.ist or not.
D & $ %&nny Pty 't#. V At"ins
#iii$ the word +)nowingly suffered himself
to be represented indicates that if a
person is represented by someone that
he is the partner of a firm! he must )now
about that representation.
/orse gies 0 situation "
#a$ He )nows before the representation
was made and it is going to be
made
#b$ He has no actual )nowledge of it
but a R/ would hae )nown it
#c$ He has discoered the
misrepresentation and he failed to
ta)e necessary step to correct it.
()areless* 1 is not liable
(negligent* where 1 does not realise the
conse-uent .1 s not liable
(re)"less* where 1 realise the
conse-uences but does not care about it.
1 is liable.
To!er Cabinet Co. 't#. V Ingram.
#i$ the representation can be made direct
or indirectly. Still 1 is liable.
Eg.
' told ( he is a partner. ( then tell the
ban) and the ban) gies credit to '. Still
liable.
Martin + ,rey
#$ the representation must be made
before credit is gien
#0$ Relian)e to the representation
the thir# party ha# a)te# on the
strength o the representation an#
m&st belie+e it to be tr&e.
He does not hae to proe that if he
)new the representation is untrue! he
would not hae gien the credit.
'yn)h + Sti
$&#gell -eates & Co. + .atson
/0C/PTION
2he proiso to s. 16 proides"
2hat where a deceased partner*s
name is continued as part of the
business after his death! that will not by
itself bind the e.ecutor or
administrators or estate by debts
contracted after his death.
#%$ /1ten#ing Cre#it
#3ien (redit$
+credit, is not defined in PA. H4eer /orse
define it as incurring any liability #money$
Martin + ,rey
ELEMENTS TO PROVE UNDER s. 16 PA