Assignment writing at masters level

In this particular case, the House of Lords ruled that “a partnership commences when the proposed partners take the first step to implement their business plan” thus confirming the partnership between Kylie and Kendall. To further confirm the partnership between Kylie and Kendall, it is known that both partners receive a profit directly from the business. In the case of J, the position of “Justine” as a partner within J can be confirmed through common law in the case of M Young Associated Ltd. V Said [2006]. Evidence that Justine is a partner in the firm is clear even though he did not contribute capital or retake in a division of the profits achieved by the firm.

In the related common law case, Said had no capital contribution nor did he receive a share in the profit, however, like the case of J, he did receive a fixed annual retainer for his supervisory role. The court verified that a person is a partner and jointly liable with others in the firm “if his agreement with them is that he should be paid by the firm a fixed sum, irrespective of profits, for work done by him”. The duties undertaken by Kylie in the day to day activities include cleaning and repairs to he shop, as well as keeping accounts and ordering stock from suppliers. This can suggest that she was given”actual express” authority to order stock from suppliers particularly since she was transacting using the business account.

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The definition of Actual Implied authority states that “Provided nothing is stated to the contrary in the partnership agreement, the powers of partners to bind the firm by their acts usually done in the course of business generally includes purchasing goods usually used by the firm”, which in the case of J] is the couch and side table. Similarly, the case of Nominal v Smith [1932] where a partner of the farming business purchased machinery used for the day to day business activities and exercised their “Implied authority’ to do so. As a result, the court held that the partnership was legally bound, in that both partners were required to pay the outstanding amount owed to the machinery company.

The correlation with J is evident in that both cases purchased goods for the use of the business. In regards to the liability of the outstanding debt owed to DEEPLY it can be observed that since Kylie is a partner of the firm, she cannot be solely liable since he purchase was made to replace the current sofa at the business place and was not purchased for Kylie’s personal use. Section 8 of the Partnership Act [1891] states that “Any act of a partner done in the usual course of the partnership business can bind the firm and the other partners. ” If they are in partnership, all partners are liable for debts owing to another company as the item they are purchasing is equipment for the business.

Since Kylie had the “actual express” and “actual implied” authority to act, her actions have ‘bound’ the partnership and ‘The partnership will be responsible for the debts” (slides). Conclusion: On the balance of probabilities, it is likely that the Queensland Magistrates court will find all partners in J liable for the outstanding debt of $30,000 owed to DEEPLY. Kylie has breached her fiduciary duty as a partner of the firm however her actions were “in the ordinary course of the business” and in a general partnership no partner enjoys limited liability (Slides) Furthermore, it is evident that Justine does form part of the partnership as he receives an annual retainer.

Partnerships, unless otherwise stated, are general partnerships in that all the ratters are liable (slides) Therefore it can be said that DEEPLY can demand the outstanding payment from and not Kylie since the item was invoiced to J not Kylie. J is liable to pay the outstanding debt as the item has already been delivered and invoiced. Although Justine had left the firm due to frustration, under Section 31 of the Partnership Act he is still liable for any unpaid accounts as he was still a partner to the business during the time of the purchase. Partners in a firm are bound to render true accounts and full information of all things affecting the partnership to any partner or his or her legal representatives.

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