Elite Business Systems UK Ltd v Price (2005)
The opening of a bank account by a father for use in his son's business was not objectively calculated to give rise to third parties concluding that father and son were conducting the business in partnership and did not authorise the son to represent that he was trading in partnership with his father.
The appellant (P) appealed against the judgment given in favour of the claimant (E) in the sum of £105,522.27 plus interest in relation to mobile phones supplied by E to P's son. P's son had wanted to set up in business as a dealer in mobile phones. The son had no banking facilities and P had opened an account in P's name which could be used to receive and make payments for his son. The wording on the cheques to be drawn on the account stated "H Price t/a Price Communication". The son entered into an agreement with E in the name of Price Communications. Without P's knowledge the son stated in the agreement that P was a partner in the business. The judge held that because P had been held out as a partner on the cheques he was to be treated as a partner by virtue of the Partnership Act 1890 s.14(1).
The only representation on which E could rely as falling within s.14(1) of the 1890 Act was that made by the son in the agreement with E. P did not knowingly suffer that representation to be made and accordingly was not liable under the section. The representation made by the son was untrue and made without authority. The judge's reasoning had been flawed. The bank account did not represent that P was in partnership with his son in the name of Price Communications; it simply stated that P was trading as Price Communication. Opening the account was not objectively calculated to give rise to third parties concluding that father and son were conducting the business of Price Communications in partnership and did not authorise the son to represent that he was trading in partnership with his father.