Notice to acting partner is notice to firm - PA 1890 s. 16
Notice to a partner who habitually acts in the business is notice to the firm, unless the partner is committing fraud on the firm or consents to it.
Notice to any partner who habitually acts in the partnership business of any matter relating to partnership affairs operates as notice to the firm, except in the case of a fraud on the firm committed by or with the consent of that partner.
Text in force at .
Source: legislation.gov.uk — The National Archives (legislation.gov.uk), reproduced under licence Open Government Licence v3.0.
What it actually says
This section says that if someone gives a notice about partnership business to a partner who regularly does the firm's work, that notice counts as if it were given to every partner in the firm. The law treats the firm as having knowledge of that information, because the acting partner is the firm's ordinary channel for receiving messages about the business.
There is one important exception. If the partner who receives the notice is themselves cheating the firm, or agrees with someone else to cheat it, then the notice is not treated as notice to the firm. This prevents a dishonest partner from using this rule to harm the other partners.
When it applies
- A supplier tells a partner who always handles orders that the price of raw materials will increase next month. The firm is bound by that notice even if other partners never hear it, unless the partner was defrauding the firm.
- A customer complains to a partner about a defective product. The firm is considered to know about the complaint.
- A bank sends a demand letter for a loan to a partner who manages the firm's finances. The firm is deemed to have received the demand.
- A partner is secretly taking bribes from a vendor to approve inflated invoices. If the vendor tells that partner about a mistake in an invoice, that notice does not bind the firm because the partner is committing fraud.
What this section does not say
- Notice given to a partner who rarely participates in the business (e.g., a silent partner) does not automatically count as notice to the firm under this section.
- This section does not cover admissions or statements made by a partner that are not notices; those are governed by section 15.
- It does not determine the firm's liability for wrongs committed by a partner; that is covered by sections 10 to 12.
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This page reproduces the text of PA 1890 s. 16 in force at the date shown and explains it in general terms. It is not legal advice and takes no account of the circumstances of your case, which can change the answer completely. For a live dispute, for limitation periods, and before taking any step in court, consult a qualified lawyer in England and Wales.