Q.P, Q, and R are partners in a firm. P, without consulting Q and R, enters into a contract to acquire a piece of immovable property in the firm's name from a seller who has no knowledge of any restriction on P's authority. Is the firm bound by this transaction?

Acquiring immovable property for the firm falls outside a partner's implied authority under Section 19(2), so the outcome turns on whether the seller knew (or should have known) of any restriction.

Since the seller had no knowledge of any restriction, the analysis turns on the absence of implied authority itself, not merely an internal restriction the seller was unaware of.

Step 1 — Identify the nature of the act. P is acquiring immovable property on the firm's behalf. Section 19(2) specifically lists this among the acts excluded from a partner's implied authority.

Step 2 — Was P expressly authorised? The facts state P acted 'without consulting Q and R' — nothing suggests Q and R had earlier expressly authorised P to acquire immovable property on the firm's behalf. Without such express authorisation, P has no authority at all (implied or express) to bind the firm to this specific kind of transaction.

Step 3 — Does the seller's lack of knowledge of a 'restriction' change this? Note carefully: Section 20's rule about a third party needing knowledge of a 'restriction' applies where a partner's IMPLIED authority has been cut down by an internal agreement among the partners. Here, the issue is different — acquiring immovable property was NEVER within P's implied authority in the first place (it is excluded by Section 19(2) itself, not by a special internal restriction), so there is no baseline implied authority for the seller to rely on at all.

Step 4 — Conclusion. The firm is not bound by P's purchase, since P acted outside both his implied authority (excluded by Section 19(2)) and any shown express authority. Q and R may repudiate the transaction; P himself may, however, be personally liable to the seller if the seller reasonably believed P had authority to act for the firm and suffers a loss as a result.