Explain partner by estoppel?Justify with examples.

Dear Lakshya,
Partners by Estoppel is a person who represents himself/herself as a partner of a firm through his/her own conduct or behaviour or attitude. Such partners are held liable for any credits or debts obtained by such representation. In short, such partners cannot deny being a partner if he/she represents himself/herself as a partner of the firm.

For example, P and Q are the partners and R is a friend of P. They asked R to allow them to use his name for their business. R agrees on this. Let us assume that P and Q took a loan from a bank against R's name and subsequently P and Q became insolvent. In this case, R would be considered as a partner of the firm and would be held liable for such loan.