Business and Corporate Law: Partnership Act 1963 and Contract Law

Business and Corporate Law

Table of Contents
Case Study 1....................................................................................................................................3
Case Study 2....................................................................................................................................4
Case Study 3....................................................................................................................................6
References........................................................................................................................................8

Case Study 1
Issue:Will partnership between the partners be bound by this contract? If yes, can other partners
take action against Lance?
Rule: Major aspects of partnership structure in Australia involve liability of all the business
partners for debts of a business. Business partners share control and management of business
altogether. Under Section 9 (1) of the Partnership Act 1963, a partner in a business except in
incorporated limited partnership, is considered as an agent of the firm as well as of other partners
for the purpose of business by the firm. Section 1 (2) binds the firm and other partners for the act
done by a partner in a firm except in incorporated limited partnership, for carrying out business
in unusual way. Similarly, Section 9 (4) states that the act done by a general partner in an
incorporated limited partnership, for recommencement in the usual way business of the kind
carried on by the partnership, binds the partnership and the other general partners in the
partnership (AustlII, 2018).
Furthermore, according to Section 7 (4) of the Act states that the receipt by a person of a share of
profits of a business exhibits that the individual is a partner in the business.
Application: Taking the Partnership Act 1963 into consideration, it can be stated that the general
partners are held liable for the act done by a partner and the partnership between the three
partners is bound by the contract done between Lance and Lyton. The Partnership Act 1963
establishes partnership between the three and it becomes the duty of each of them to be binding
to the contract made between Lyton and Lance. However, when Lance was instructed to
purchase the car within $20,000, he purchased the car in $25,000. So, it will be the responsibility
to compensate the remaining amount or he should have informed the other partners about the