Breach of Partnership Agreement

This business law assignment examines a scenario where Michael, a partner in a nursery business, breaches the partnership agreement by negotiating cheaper products for personal commission. The assignment analyzes Michael's actions under the Partnership Act 1963, exploring the fiduciary duty owed to partners and the legal consequences of his breach. It further discusses the remedies available to Jan and Sue, the other partners, including damages claims, injunctions, and dissolution of the partnership.

Running head: Assignment
Business Law Assignment

Assignment 1
The present problem is based on the Partnership Act, 1963. A partnership is an agreement
made between two or more parties with a purpose to carry out any business accompanied
with an intention to earn profits out of such business. The partnership agreement does not
require to be made in writing (Davenport and Parker, 2012). It often considered as a wise
decision to carry a written agreement on partnership. As per facts of the case, an unwritten
partnership does not affect the merits of the case.
As per facts of the case, the business of a partnership is nursery and run by three partners
namely Michael, Jan and Sue. The policy of partnership was based on the selling the best
qualitative products and such policy is implemented in an every months of meeting
conducted between all three partners. The issue arises in the present case when a Michael has
breached the fundamentals of the business policy. The breach taken place at a time Michael
negotiates a usage of cheap products for nursery and earns a commission on such illicit act.
Generally, all the acts of the Partners are obligatory against each other, and the core theme of
partnership run on a fiduciary duty. This theme is not attracted in the present problem as per
ruling of the case, Goldberg v Jenkins (1889) 15 VLR 36 held that all partners are not obliged
with an act of any one partner if such act is malicious with an interest of other partners.
According to facts of referred case a partner borrowed the 60 per cent interest which was not
the usual way of the business (Morse, 2010). Also the Regal (Hastings) Ltd v Gulliver (1942)
[1967] 2 AC 134 and Cook v Deeks [1916] 1 AC 554 where house of lord stated that if any
partner commit any breach of utmost good faith, then such partner is also penalized to pay
back any monetary gains earn.
The partners can bring an action of damages for breach of the essence of the partnership
agreement in the perspective of the fiduciary duty and also for damages for misleading and
deceptive conduct performed by Michael under the provisions of part fourth of the Australian
Partnership Act, 1963.(Latimer, 2012).
Michael’s action in failing to disclose the negotiation with third party and receiving the
commission without a partners’ consent lead to breach of his duties and liabilities under the s.
33 of New South Wales, s.28 of Northern Territory, s.32 of Queens Land, s.31 of South
Australia, S.28 of Tasmania, s.33 and 37 of Victoria and s.39 of Western Australia).
The partners can also apply for the immediate relief by the application of the injunction to the
court of law in order to restrain the further breaches of Michael. Moreover, an action to

Assignment 2
dissolve the partnership can be put forth in the court of law. Such dissolution action can be
bring either with an intervention of the court or may also bring without intervention of the
court of law (Mitchell et.al. 2016).
Therefore, as per response to the problem, Jan and Sue are legally entitled to bring an action
against Michael and can also dissolve the partnership agreement according to above stated
circumstances.

Assignment 3
References
Davenport, S. and Parker, D., 2012. Business and law in Australia. Law book Co.
Morse, G., 2010. Partnership law. Oxford University Press.
Latimer, P., 2012. Australian Business Law 2012. CCH Australia Limited.
Mitchell, R., O'Donnell, A., Marshall, S. and Ramsay, I., 2016. Law, corporate governance
and partnerships at work: a study of australian regulatory style and business practice.
Routledge.