Business Law: Partnership, Contractual Liability, and Negligent Misrepresentation

Running Head: BUSINESS LAW
Business Law
Name of the Student:
Name of the University:
Author Note

1BUSINESS LAW
Answer 1
Issue
The issue which has been identified in the situation is to provide advice to Julio, Carolyn and
Trisha with respect to the type of business structures which they are using for the purpose of
carrying out their business activity.
The issue is also to identify the status of Julio, Carolyn and Trisha and Sarah in relation to the
business
Rule
In the case of Goudberg v Herniman Associates Pty Ltd [2007] VSCA 12 the court made a ruling
that when two or more people carry out a business activity in common having the purpose of
making profit and the business is of an ongoing nature than such business activity is held to have
been carried out under the business structure of a partnership
Whether a partnership is present or not can also be identified through the application of the
provisions of the Partnership Act 1958. As stated via the section 5 (1) of the PA 1958 a
partnership is defined as a relationship which is present between individuals who carry out a
business having a common intention of profits.
The rules for the determination of a partnership gave been provided through the provisions of
section 6 of the legislation. It has been specifically provided through the provisions of section
6(3)(d) that the advance of money provided via the way of loan to people engaged or are about
to engage in a business activity with respect to an agreement that the lender is entitled to get a
rate of interest which may vary as per the profit or a share of profit does not make such person a

2BUSINESS LAW
partner of the business where such contract is signed by the parties involved in the business. In
addition the sharing of profit is a prima faice proof that the persons are the partners of the
business as per section 6(3) unless exceptions provided in section 6(3)(a)- 6(3)(e) are not
applicable
Application
The business they are carrying out is a partnership. This is because as per section 5 (1) of the PA
1958 a partnership is defined as a relationship which is present between individuals who carry
out a business having a common intention of profits. Here also business is carried out in common
for the purpose of making profit
The fact of the scenario stipulates that Julio, Carolyn and Trisha has initiated a business of
providing financial advice for the purpose of earning profit. They also have equal say in the
management of the business and take part in managing the business activity. They also have the
intention of earning profit form the business. Thus their status in the business is that of partners.
This is because as stated by section 6(3) the sharing of profit is a prima faice proof that the
persons are the partners of the business unless exceptions provided in section 6(3)(a)- 6(3)(e) are
not applicable. He no exception is applicable in relation to Julio, Carolyn and Trisha. However
Sarah has provided a loan to the business under an agreement that she will be getting 2% of the
profit. She has no interest in managing the business. Thus it can be stated that she is not a partner
of the business. This is because section 6(3)(d) says that the advance of money provided via the
way of loan to people engaged or are about to engage in a business activity with respect to an
agreement that the lender is entitled to get a rate of interest which may vary as per the profit or a
share of profit does not make such person a partner of the business.

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Conclusions
The business is a partnership and Julio, Carolyn and Trisha are partners but not Sarah
Answer 2
Issue
The issue is to discuss the contractual liability of Julia and his business partners in relation to X
under the provisions of Contract law.
Rule
Damages under the law of contract depend upon the application of various rules.
Damages can be provided under both common law and statute law provisions.
There are a few implied warranties which have been imposed upon those who indulge
into providing services in Australia via the provisions of section 60-63 of the Australian
Consumer Law contained on Schedule 2 of the Australian Competition and Consumer Act 2010
(Cth). Under the provisions of section 60 of the ACL a guarantee is provided in relation to
services provided that such services will be given by observing due care and skill. Under the
section it is stated that a person who supplied in trader or commerce to a consumer services in
Australia there is an implied guarantee that services would be provided with due skill and care.
Sub division B of the ACL section 267 deals with provisions related to actions against
suppliers where consumer guarantees have been breached. Action may be taken by the consumer
under the section in case the consumer has been supplied in the course of trade and commerce
with services and the guarantees which have been provided via Subdivision B of Division 1 of
Part 3-2 have been breached, unless the breach in context is in relation to section 60 of the Act