ILAC20Assignment20Sem201 Essay

952 WordsMay 31, 20154 Pages
ILAC Assignment Issue: Does a partnership exist between Kendall, Kylie and Justin? Is “JJJ Boutique” or any other parties within “JJJ” able to be held liable for the outstanding debt owed to “Elegant Design Furniture Pty Ltd” (EDFPL)? Law: Statute: Section 5 Partnership Act 1891 (Qld) (PA): Carrying on a business with a view of profits Section 8 (PA): Power to bind firm s31 (PA) - Duty of partners to render accounts Common Law: M Young Legal Associates Ltd v Zahid (2006): ‘The receipt by way of annuity or otherwise of a portion of the profits of a Business in consideration of the sale by that person of the goodwill of such business’ Molinas v Smith (1932): ‘actual express & actual implied authority’ Khan v Miah (2000): ‘Carrying on a…show more content…
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 the 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. 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 JJJ is the couch and side table. Similarly, the case of Molinas 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 JJJ 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 EDFPL, it can be observed that since Kylie is a partner of the firm, she

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