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Question -

In which form of organisation is a trade agreement made by one owner binding on the others? Give reasons to support your answer.



Answer -

It is under partnership that the trade agreement made by one owner becomes binding for others. This is because every partner acts for each other. In other words, every partner is both a principle as well as an agent. As an agent he binds others through his actions and as a principle he is bind by the action of others.

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