Practical Treatise on Law of Partnership †MyAssignmenthelp.com

Question: Discuss about the Practical Treatise on Law of Partnership. Answer: Introduction: The partnership is built on the basic understanding of sharing responsibility and sticking to the general agreement that was created upon establishment of the association (Graw, 2011). Lance can be sued for breach of the partnership agreement. When lance buys the motor vehicle, he has a cap on the amount that he can be able to spend (Cracknell, 2004). There are three rules for liability in a partnership business. Every partner is liable for his or her own action undertaken separately ( Individual responsibility) Every partner is liable for the action taken by all other partners jointly( collective duty of care) Every partner is liable for the action of the business employees Lance will take individual responsibility for his action. In the partnership agreement, a partner can only spend a given amount of money that is authorized. Lance spent more which is contrary to the agreement. Although, Lynton does not know the terms and conditions of the partnership, so he goes ahead and sells the car. He is not guilty of these actions. This is a business where more than two people jointly own a property or a business as well as have a shared responsibility of managing the company. They share the income and the losses generated by the business according to the agreements on the partnership shares. Most partnerships between two people are shared on an equal basis. Incomes from the business are paid to partners who then have to claim it for the tax refunds. Partnership business does not have taxes on the profits and losses unlike in corporations (Underhill, 2013). Applying the law to the case study In the general partnership, the partners share the same managerial responsibility and workload equally. The profits and losses generated by the business are shared by the partners who are all actively involved in the business operations. The limited partnership is a completely different set up and structure. It allows outside investors to buy into the business but have a limited scope in terms of participation that is largely based on their contribution. It is complex and turns out to be a little bit hard in terms of decision making of the company (GOW, 2016). Thirdly, the joint partnership project is only focused on joint project undertaking that attract alliances and associations by multiple partners. If the joint project is successfully tabled and implemented, it will evolve to a general partnership or association. If the project is cancelled, it will lead to cancellation of the intended partnership. In this business Lance buys a new motor vehicle for the herbal products business. There are three partners in this business and Lynton, the car salesperson is not aware that Lance has a cap on the money that he can spend (Blackett-Ord Haren, n.d.). in a general partnership, partners are required to act in a prudent manner with regard to carrying out activities and business of the partnership. This is known as duty of care. The primary purpose of this is to make partners act reasonably, without any conflict of interest and in good faith when making business decisions for the partnership. Lance is therefore expected to make decisions that wont affect the business when transacting on behalf of other partners. Unlike corporations, which helps partners to join through responsibility, associations have shared and individual responsibilities (Goode, 2009). This means that all partners are responsible for their actions and are supported by the company, as are the actions of the other partners. In an partnership agreement, the terms and conditions of establishment of the herbal business product were set. It is in this partnership agreement that the remaining two partners will use to sue Lance. He is liable his individual actions. Losses arising from the transaction will be affected to Lances account. It is arguably correct to say that lance should have consulted the other partners on the best possible way of dealing with the issues. Although, the car will be used for business purposes, the partners may agree that he contravened the rules and regulations that guide the establishment of the partnership (Graw, 2011). Since a partnership involves people undertaking a common business for profit. In a general partnership, partners are fiduciaries to each other. This means that partners owe each other certain basic duties and also to the business. A partnership is one relationship that requires the partners to exercise honesty, fairness, good faith, loyalty and fairness. Therefor e, partners like Lance are expected to act for the benefit of all partners when transacting on behalf of the business. The highest standards of care are expected from a partner. Fiduciary duties, imposes on a partner that they should not take advantage of one another by concealment, misrepresentation, adverse pressure and threat relating to the partnership and its business. Lance has misrepresented as well as concealed information from Lynton about the limit placed on the amount that he can spend to purchase the car (Bradgate, White Llewelyn, 2012). Another of the fiduciary duties is the duty of full disclosure. A partner in a general partnership is expected to disclose fully to fellow partners any information relating to the business that could affect the partners interest in the business (Bradgate, White Llewelyn, 2012). This duty of disclosure is not owed only to partners but also to anyone who is in one way or another transacting with the partner on behalf of the business. For example, Lance would have disclosed to Lynton about the limit placed on the amount that he was to spend. The three rules of liability in a partnership are, That every partner is liable for their actions, a partner is liable for the actions of the other partner and every partner is liable for the action of employees (Boros Duns, 2013). Therefore, in general partnership each partner can incur liability for his own acts and omissions or acts of the other partners. A partner can sue another partner for settlement of the partnership general account and for dissolution of the partnership (Roth Kindler, 2013). Under the partnership Act, one of the partners can sue for dissolution of the firm if a partner consistently and deliberately commits breach of agreement relating to the firms management. Other grounds for dissolution are when a partner becomes insane and / or is incapable of performing his partnership duties. A court can only pass a decree if the conduct of the partner is deemed to be a calculated prejudice of the business. Lance has the duty of good faith and fair dealing, which begins when a partnership is being formed. This duty continues throughout the life of the business and extends to the point of complete settlement and dissolution of the partnership(Roth Kindler, 2013).. Even when there is a strain in relations between partners, all partners are expected to act in good faith and fair dealing. However, lance did not act in good faith when he ignored to disclose the limit that the partners had placed when buying the vehicle. This could eventually harm the business and relations between partners. Other partners should take action against Lance for going against what they had agreed in regards to how much should be spent for the vehicle. In this case The partners may not take the legal route, because lance has not consistently breached the agreement in other occasions. However, partners can draft a way of ensuring that there are consequences when one of the partners breaches an agreement in the partnership agreement. The partnership however can not be bound by this contract, because dissolution can only occur if the other partners establish that Lance has been consistently breaching the agreements made by the partners (Reddy Canavan, n.d.). He however, should pay back the money exceeded during the purchase of the car. One of the legal issues that arises from the above case is that there is misrepresentation. Misrepresentation is the process of giving consumers false information about the use of a product during adverting. The moisturizing product does not actually slow the effects of ageing and this is misrepresentation of a product. This is known as product liability. On the other hand the legal issue is whether Saqlaim the refugee has been taken advantage of by the partners when they sell to him the car(Goode, 2009). The principle in use here is known as uberrimae fidae. This is a minimum standard that requires the seller and the buyer in a transaction to act honestly towards each other and not withhold or mislead critical information about the product from each other. This principle is also known as Utmost good faith. Xiaojing should notify the consumers on the actual uses of the moisturizer, and also on the other hand the partners should not take advantage of Saqlaim(the refugee) little knowledge of English to sell to him a car. This is unethical. In the case of Xiaojing, false information is telling the consumers that the moisturizer will slow the effect of ageing. Since a false statement must be one of fact, consumers who are aware of the fact that the moisturizer has been misrepresented and has got no effect on ageing can sue Xiaojing for the loss incurred when they purchased the product. According to the law, sellers are not supposed to misrepresent their products in order to make people buy the product(Graw, 2011).. On the other hand, Saqlaim cannot sue the partners who sold for him the car. If the car was not defective and all the partners had agreed on selling it, then there is no liability on part of partners. The fact that Saqlaim has little knowledge of English cannot be used in a court of law to make a case that Lance took advantage of him when selling the car. The principle of willing buyer willing seller applies here(Goode, 2009).. Xiaojing can be sued by the consumers and any contract that he has with other companies can be rescinded as a result of misrepresentation of a product. On the other hand, Saqlaim is bound by the contract because he entered into the contract willingly. He cannot sue for any loss. The legal issue in this case is the non-payment of services provided by Felix to Xiaojing. Although a casual laborer, Felix is entitled to his wages at the end of services rendered. This case also borders on business ethics and laws(Goode, 2009). The concept of ethics in business relates to the goodness and badness or the righteousness or wrongness of an action in relation to identifiable external behavior. The society determines what is wrong and what is right. However, there is a legal problem in this case because there is no contract between Felix and Ms. Xiaojing. It is important that the ethical issues in this case be addressed. There was no contract between the two and it would be hard to sue or seek any legal redress if the work was not signed under a contract. Laws in employment require that everybody upholds common legal ethics in business and in hiring. Non-compliance and non-obedience of the laws will only lead to legal issues as the society has set standards for which the to seek legal redress(Graw, 2011). Conclusion In conclusion, Felix cannot seek legal redress as he cannot authentically produce a contract under which he was legally hired. In this case, ethical issues arise where it is only right ethically for the employer to pay him. References Blackett-Ord, M., Haren, S.Partnership law. Boros, E., Duns, J. (2013).Corporate Law. Melbourne: OUPANZ. Bradgate, R., White, F., Llewelyn, M. (2012).Commercial law. Oxford: University Press. Commercial law. (2006). London. Cracknell, D. (2004).Commercial law. London: Old Bailey. Goode, R. (2009).Commercial law. London: Butterworths. GOW, N. (2016).PRACTICAL TREATISE ON THE LAW OF PARTNERSHIP. [S.l.]: FORGOTTEN BOOKS. Graw, S. (2011).An outline of the law of partnership. Rozelle, N.S.W.: Thomson Reuters (Professional) Australia Limited. Reddy, J., Canavan, R.Q A commercial law. Roth, G., Kindler, P. (2013).The spirit of corporate law. Oxford, United Kingdom: Hart. Underhill, A. (2013).Principles of the law of partnership. Miami, FL: Hardpress Pub.