Partnership Business | Question and Answer

Running head: PARTNERSHIP BUSINESS
PARTNERSHIP BUSINESS
Name of the student
Name of the university
Author note

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Answer to question 1
The partnership is the association that exists between the individuals who executed the
transaction in common with the intent to attain a profit. The partnership in Australia is regulated
and governed by the Partnership Act, 1891 (Rosenfeld et al. 2015). In order to determine whether
there is the existence of a partnership between the parties, the following factors are taken into
consideration. Firstly, the intent of distinct parties who engaged in the agreement (Rose 2015).
Secondly, the parting with the losses and profit of the business among the individuals. Thirdly,
the joint management as well as the regulation of the operation of the transaction. Fourthly the
investment of capital by each partner. Fifthly mutual ownership of the property (Wilkins 2015).
The advantage of the partnership structure of the business is it is easier to create the transaction
in addition to that the startup expense is also less in comparison to other business structures
(Oktavianus and Mahani 2018).
There is the existence of partnership in the particular case, and the partners involved are
Kyle, Jackie, and Lynn. In this case, Jackie and Kyle are the hairdressers. They met at the course
of TAFE hairdressing, and they lived in Adelaide to function together. As they have little money,
they offer one of his customers named Lynn, who is the medical practitioner, to take part in the
transaction. Lynn contributed $100,000 to the transaction. At the conclusion of each week, the
profit is among three of the partners.
In the case of United Dominions Corporation Ltd v. Brian Pty Ltd (1985) Dawson J, the
single law as per the legislation may or may not rest on the scope amounting to executing the

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business. In this case, it had been held that the fiduciary association, along with the fiduciary
responsibilities, might exist between the potential partners who are embarked upon the
performance of partnership prior to the conditions of the arrangement have settled.
Answer to question 2
The legal association of partners of the partnership firm is the concern for all the partners.
The agreement of partnership set forth the right as well as the responsibilities of the partners in
the business (Chung 2016). Furthermore, it also involve the rules that regulate the method in
which the partnership can administered. Section 9 of the partnership act set forth that each and
every partners who are engaged in the partnership business is liable mutually with other partners
in respect of all debts as well as the obligations of the business that is incurred which there is
subsistence of partnership (Chung and Hensher 2015). The partnership Act, 1891 laid down the
joint liability of all the partners in respect of the debt as well as obligation of business that is
incurred during the period of involvement in partnership business (Li, Abraham, D. and Cai
2017). That implies that the partners are also liable for the debt in respect of which he has no
authority or knowledge. The partners are severally and jointly liable implies that in addition to
the shared liability in respect of debts they are individually personally accountable for debts that
are incurred in the tag of partnership. In case of lease the rent of the lease is to be paid within
three months by agreement. However in this case the payment of lease in respect of the
hairdressing premises fall beyond three months then it is the all the partners in accordance to
Section 9 of the partnership Act, 1891 are liable to pay the rent.
In the case of Wang v. Rong [2015] NSWSC 1419, it had been ruled out by the Supreme
Court of New South Wales that the partners to the franchise shop where need to contribute equal
amount of period operating in the business due to the terms and methods applied in distribution

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of the profit. The court identified that there exist no term in the agreement of partnership
necessitating the partners to labor for certain period in the business of partnership. Furthermore
the application of the term “ wages” and “asalry” in arrangement implies that the partners were
not authorized to the salary in case they did not contribute reasonably required quantum of
period to the partnership business.
Answer to question 3
Section 11 and 12 of the partnership act enumerates that the partners are severally and
jointly liable in respect of the misapplication of the property or money of the third person that
has been positioned under the custody of partnership (Liu and Wilkinson 2015). In accordance
top partnership Act, when the firm in the course of the business obtains property or money that is
belonged to the third party, and the property or money that is obtained is misused by any one of
the partners during the period it is in the custody of firm (McQueen 2016). Then the partnership
business is entitled to compensate any loss or goods arising out of it. Partners are liable
personally in respect of the business obligation of the partnership (Bakker 2016). As the partners,
the responsibility comprising of acting in good faith, indemnify in case of loss, to perform the
duties diligently, to indemnify in case of willful neglect. Furthermore, to part with the loss of the
partnership firm, to use and hold property of the firm, to account in respect of private profits.
Thus kyle, in the violation of the partnership obligation carry out separate business by
utilizing partnership property for hairdressing of his band. As the partner, Kyle should not use
the property that is in the custody of partnership; business carried out by three partners for a
separate business. In addition to that, Kyle did not act in good faith, and also in pursuance to the
partnership act, all partners are entitled to share the profit as well as loss. However, kyle failed to
perform in this regard.

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In the case of Collen v. Wright (1857) 120 ER 241, the land agent approve to grant a
lease to the plaintiff. He has no power from the principal to approve the lease of length that was
agreed upon. Thus the plaintiff was authorized to claim damages in respect of loss sustained rest
on the implied warranty of the authority.
Answer to question 4
According to section 10, any wrongful omission or act of a partner in the business other
than that of the incorporated partnership which is of limited nature act in the normal path of
business of the firm is accountable for injury or loss or penalty to a similar degree as the partner
act or neglect to act. The agency law by the expressed condition is applicable to the legislation
regulating partnership. The partner is treated as the agent in the partnership business. The
regulation affecting the tortious liability of partners and those that affect contractual liability are
identical. Thus the partnership is accountable in respect of the wrongful omission or act that is
committed by one of the partners while acting in the normal path of the transaction of the
partnership. As in agency law, the principal is liable for the wrongful act or omission of the agent
while acting the normal course of the agency. In pursuance of the partnership act, the partners are
treated to be severally and jointly accountable, and the plaintiff can raise an action against all the
partners. In this case, Betty, who is one of the consumers, suffers a severe injury to her scalp
resulting from the careless action of Jackie. Betty gets treatment in the hospital, and as a result of
this, she is entitled to claim compensation and also sue against all the partners involved in the
partnership business, or she may raise an action against Jackie only.
In the case of Polkinghorne v. Holland (1934) 51CLR 143, it has been held that the
partners of Harold were accountable in respect of $5000, Polkinghorne had dropped from
investment in the SA Trust Investment Co Ltd as well as in Secretariat Ltd however they were no

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accountable for $475 that she drops by assuring Secretariat Ltd overdraft. They were responsible
for the first series of dropping due to the reason that on both the incident, Polkinghorne had
particularly proceeded Harold for an opinion on fiscal merit of suggestion prior to making an
investment.
Answer to question 5
In the instant case, if Betty fails to discover who is the actual owner of the business, then
she can initiate litigation against the partnership firm. The person is said to be accountable for his
own tortious act. The wrongful act or omission that constitutes a tortious act is the failure to
exercise reasonable care to act in the course of his duty, and henceforth the loss is sustained by
the aggrieved party. Then the general rule is that the aggrieved party is entitled to claim damages
for the loss incurred due to the negligent act of one of the partners in partnership business. All
the partners are liable in respect of the tortious act of any partners that are committed in the
scope of the business of the partnership. The partner who is guilty of a tortious act or the
infringement of trust should indemnify partnership in respect of the losses that are paid to the
third party. In the instant case, after four months, Jackie, Kyle, and Lynn move their partnership
business to new premises, where Jackie applied hair dye to Betty, who is a customer, and due to
this, Betty suffers severe loss or injury. Thus Betty is entitled to sue against the partnership
business, and thereby, all the partners are distinctly accountable in regard to the entire debt
amount.
In the case of Cox v. Hickman, it had been held that deed provides special authority to
creditors. There were provided choices concerning whether or not trade must be continued in
addition to that establishing regulation as to the operation of trade. The deed is the mere
agreement between the creditors along with Smith to make repayment to creditors out of the

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future or existing profits. The association of debtors and creditors establish the relationship
between agent and partners. The trustee is accountable as the agents, but creditors are not trustee
principals.
References
Bakker, R.M., 2016. Stepping in and stepping out: Strategic alliance partner reconfiguration and
the unplanned termination of complex projects. Strategic Management Journal, 37(9), pp.1919-
1941.
Chung, D. and Hensher, D., 2015. Risk management in public–private partnerships. Australian
accounting review, 25(1), pp.13-27.
Chung, D., 2016. Risks, challenges and value for money of Public–Private
partnerships. Financial Accountability & Management, 32(4), pp.448-468.
Li, S., Abraham, D. and Cai, H., 2017. Infrastructure financing with project bond and credit
default swap under public-private partnerships. International Journal of Project
Management, 35(3), pp.406-419.

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Liu, T. and Wilkinson, S., 2015. Critical factors affecting the viability of using public-private
partnerships for prison development. Journal of management in engineering, 31(5), p.05014020.
McQueen, R., 2016. A Social History of Company Law: Great Britain and the Australian
Colonies 1854–1920. Routledge.
Oktavianus, A. and Mahani, I., 2018. A Global Review of Public Private Partnerships Trends and
Challenges for Social Infrastructure. In MATEC Web of Conferences (Vol. 147, p. 06001). EDP
Sciences.
Rose, E., 2015, November. A feminist reconceptualisation of intimate partner violence against
women: A crime against humanity and a state crime. In Women’s Studies International
Forum (Vol. 53, pp. 31-42). Pergamon.
Rosenfeld, E.A., Marx, J., Terry, M.A., Stall, R., Pallatino, C. and Miller, E., 2015. Healthcare
providers’ perspectives on expedited partner therapy for chlamydia: a qualitative study. Sexually
transmitted infections, 91(6), pp.407-411.
Wilkins, T.S., 2015. From strategic partnership to strategic alliance? Australia-Japan security ties
and the Asia-Pacific. asia policy, (20), pp.81-112.