Section 163 The Indian Contract Act, 1872
Section 163 – The Indian Contract Act, 1872
Title: Liability of partners for acts of the firm
📜 Bare Act Language:
"Every partner is liable jointly with the other partners for all acts of the firm done while he is a partner."
🔍 Explanation:
Section 163 deals with partnership law (which is part of the Indian Contract Act). It states that:
Every partner in a firm is jointly liable along with all other partners for the acts and obligations of the firm.
This means if the firm incurs any debt or liability during the period a person is a partner, that partner is responsible jointly and severally with the others.
This liability continues as long as the person remains a partner.
🧠 Key Points:
Liability is joint and several — creditors can sue any or all partners.
Applies only to acts done while the person is a partner.
Partners must share responsibility equally unless agreed otherwise.
⚖️ Example:
If a firm enters a contract to buy goods on credit, all partners are liable together if the firm fails to pay.
📚 Related Sections:
Sections 161 and 164 (deal with liability of partners to third parties)
Indian Partnership Act, 1932 (expanded the law on partnerships)
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