Final answer:
Limits on a partner's authority are normally effective only with respect to third parties who are notified of the limitation. This statement is true.
Step-by-step explanation:
Limits on a partner's authority are normally effective only with respect to third parties who are notified of the limitation. This statement is true. In contract law, a principal is generally bound by the actions of their agent if those actions are within the scope of authority granted to the agent.
However, if a partner's authority is limited and this limitation is effectively communicated to third parties, then the partner cannot bind the partnership or the other partners beyond the extent of their specified authority.