"Every ordinary commercial or trading partnership is presumed to be based on the mutual trust and confidence of each partner in the skill, knowledge and integrity of every other partner." Comment upon the above statement.

Question: "Every ordinary commercial or trading partnership is presumed to be based on the mutual trust and confidence of each partner in the skill, knowledge and integrity of every other partner." Comment upon the above statement. [RJS 1979]

Find the answer to the mains question of the Law of Partnership only on Legal Bites. ["Every ordinary commercial or trading partnership is presumed to be based on the mutual trust and confidence of each partner in the skill, knowledge and integrity of every other partner." Comment upon the above statement.]

Answer

The Statement highlights a fundamental presumption in commercial or trading partnerships, emphasizing the importance of trust and confidence among partners.

This presumption reflects the essence of a partnership, where individuals come together to carry on a business with a shared objective. Partnerships rely heavily on cooperation, collaboration, and the pooling of resources, which necessitate trust and confidence among the partners. It is expected that each partner brings their expertise, capabilities, and honesty to the partnership, contributing to its success. 

Section 9 of the Indian Partnership Act says,

"Partners are bound to carry on the business of the firm to the greatest common advantage, to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to any partner or his' legal representative."

The Presumption of Trust and Confidence implies that partners should have reasonable expectations that their fellow partners will act in good faith, exercise their skills and knowledge in the best interest of the partnership, and maintain a high level of integrity. This presumption not only promotes smooth business operations but also encourages partners to work collectively and contribute effectively to the partnership's growth.

However, it is important to note that this presumption is not absolute. The Indian Partnership Act also recognizes that partners may enter into partnership agreements that explicitly define the terms and conditions of their relationship. These agreements can override the general presumption and establish different expectations or obligations among the partners. Therefore, it is crucial for partners to clearly outline their rights, duties, and responsibilities through a well-drafted partnership agreement to avoid any misunderstandings or disputes in the future.

The presumption of mutual trust and confidence in the skill, knowledge, and integrity of each partner is a fundamental aspect of the Indian Partnership Act. It reflects the essence of partnerships and establishes a foundation for cooperation, collaboration, and the successful operation of the business.