Application of Law - Assignment PDF
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Added on 2021-05-31
Application of Law - Assignment PDF
Added on 2021-05-31
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1ContentsAnswer 1.....................................................................................................................................................2Issue........................................................................................................................................................2Law..........................................................................................................................................................2Application of law...................................................................................................................................3Conclusion...............................................................................................................................................4Solution 2....................................................................................................................................................4Duty of care and diligence.......................................................................................................................5Duty of good faith...................................................................................................................................6Reference List.............................................................................................................................................8
2Answer 1IssueWhether the venture that exits amid Samuel, Thomas and Peta is a partnership or not?LawAny person intends to take a business in Australia can do so in the form of sole trade ship,partnership or in the form of a company. A partnership is one of the most promising business structures that are prevalent in Australia. apartnership is a relationship which exists between two or more person who with commonintention decides to carry on a business of continuous nature. Once a partnership is establishedthen each partner is the agent of each other and that of the partnership firm and vice versa. Thelaw of partnership and its elements are discussed in Smith v Anderson (1880). (Cassidy 2006)But, at times it becomes extremely difficult to distinguish whether a business structure is apartnership or not. In order to do so, it is necessary that all the elements that constitute apartnership must be analyzed. The same are as follows:Two or more persons In any partnership the basic requirement that is needed to form any kind of partnership is thatthere must be minimum two and maximum twenty persons to form a partnership and is rightlyheld in Playfair Development Corporation Pty Ltd v Ryan (1969). An individual can only form asole trader ship or company but for a partnership two persons is must. Common intentionCommon intention signifies that all the partners must aim at the same thing at the same time. Thepartners who carry on the business must comply with their acts in order to achieve the objectivefor which the business is formulated by them and is rightly held in Re Ruddock (1879). The lawdoes not establish that all the partners must indulge in the activities of the business, rather,partners can be non active and sleeping also, but, still the intention amid them must be commonin nature. Carrying on business
3 Once two or more person join together with the common intention then it is necessary that thebusiness which they are carrying must be of continuous nature or at least the parties intend tocarry out the transaction of continuous nature. A single act can also be construed as an action ofpartnership provided the parties intent to consider the same as an act of partnership and is held inKeith Spicer Ltd v Mansell [1970].Profit sharingThe partners to the partnership firm must carry on the business with common intention and thebusiness of continuous nature with the aim to earn profits and share them amid themselves. Theratio amid which the profit must be shared is as per the terms of the partnership, but, it is relevantthat the profits must be shared amid them to make any association as a partnership in nature. Theconcept of profit sharing as one of the elements of partnership is rightly held in Wise v PerpetualTrustee Co Ltd [1903] .Thus, when all the above elements are formulated amid the partners, that is, two or more persons,common intention, carrying on business and profit sharing then the acts are carried out by theperson in the form of partnership.The law is now applied to the facts of the case. Application of lawAn internet business of reselling products over the vast internet market is intended to be initiatedby Samuel, Thomas and Peta. Now, in order to establish a partnership business amid them it isnecessary that all the elements of partnership must be comply with.It is submitted that the business that is intended to be carried on is by three persons, that is,Samuel, Thomas and Peta. Thus, the first requirement of two or more person to form partnershipis met. Now, all the three that is, Samuel, Thomas and Peta, intent to carry on the business of resellingproducts over the vast internet market. The main aim of the business was that they buy the goodsand products from the companies which are at the stage of winding up and they then resell theproducts so that they are able to earn the profits. Now, the main intention of the three is common.
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