logo

Business and Corporate Law Assignment

   

Added on  2020-04-15

10 Pages1946 Words294 Views
Running head: BUSINESS AND CORPORATE LAWBusiness and Corporate LawName of the StudentName of the UniversityAuthor Note

1BUSINESS AND CORPORATE LAWCASE STUDY 1Facts of the caseLance is a partner in the herbal product partnership business. All the three partners havecome to an agreement to purchase a car for the business and Lance was instructed not to spendon the purchase beyond $ 20000. Lance purchases a car from the seller Lynton, who was sellingthe Ute car for the company Mighty Motors Pty Limited. The car which was bought by Lanceamounted to $ 25000 which was beyond the amount as agreed upon by the contract ofpartnership. Lynton, the car seller was aware about the business but he did not know that Lancehad a purchasing limit as per the partnership agreement (Coffee , Sale & Henderson, 2015).Rule (s)Partnership is bound by the contract. The contract is a legal document where the liabilityof the person is joint and several. If any person enter a contract then they are liable to thecontract jointly. In the form of partnership there is a concept of entity and each and every onewho has formed the partnership firm has unlimited liability.Thus the partners are subject to theactions of other partner Lance (Al-Khafaji, Lo & Kelly, 2014).Under the partnership Act, each and every partner shall be sued if a joint action is boughtagainst them. Any of partners can be sued on an individual basis for the damages which wereassociated to a wrongful act by the partner Lance. As per the partnership act they provide forindemnification for any deed (O’Connor & Asthana, 2015).Analysis/Application

2BUSINESS AND CORPORATE LAWThe partners had a contract of partnership and each and every one was severally boundby the contract. The negative thing about the partnership Act is that the partnership is a form ofbusiness organization where it imposes liability on all the partnerspersonally and without anylimit. The Act provides that all the partners in the partnership firm are severally and jointly liablefor all the obligation of the partnership unless otherwise agreed by law (Butcher & Dalton,2014).Eachof the partners in the Partnership Act owes a fiduciary duty to the partnership andeach of the partners act on the good faith which requires a partner to account for any benefit thatthey receive during the partnership deed. Each of the partners has a duty to be loyal and thus itrestricts the partner so that they do not use any personal benefit and restricts in the partnershipengaged in usurpingthe partnershipopportunities (Walsh, Hirst & Messina, 2016).ConclusionThere are many cases when the partners acted beyond the contract, the Court ruled andgave the verdict that all the partners in the agreement shall be liable to the obligation andtherefore shall be bound by the agreement. If there are no provision in the partnership deed thenLance who purchased the car would not be attracted to the obligation but there was an agreementbetween them that the amount spend should not exceed $ 20000 and Lance has acted beyond thecontract therefore all the partners can take action against him. The courts in a number of caseshas held that the suit is for enforcement of any right arising out of a contract entered into by oron behalf of the registered firm with the partners or with the third parties in the course of thefirm's business transactions.

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Legal Issues and Remedies in Partnership, False Advertising, and Promissory Estoppel
|9
|1898
|268

Legal Issues in Partnership Law
|10
|2400
|147

Business and Corporation Law
|9
|1814
|281

LAW 6000– Business and Corporate Law
|10
|1895
|86

Business and Corporate Law Case Studies
|9
|1963
|206

Liability of Partnership and False Advertisement: Legal Analysis
|9
|1941
|237