Partner by Estoppel: Where a person causes, by his conduct, another to believe him to be a partner and on that belief such other person gives credit to the firm, he is estopped from denying that he is a partner.
Example: X, Y and Z are partners of a firm. X, in the presence and within the hearing of A, represents to D that A is a partner of their firm. A does not contradict this representation. A, on faith of that representation, lent Rs. 5000 to the firm, A, is liable as a partner.