ILAC
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ILAC
ISSUES:
Under the Act of 1891
Was Christian’s presence in the business in harmony with the Act?
As a legal partner of the business, did Christian have to get permission from his colleagues before purchasing the chairs?
Is it possible for Fantastic to file a case against the business to claim his balance?
Should Fantastic file a suit against Christian alone or the whole company
LAW: Business Law – Partnership
Statute: Partnership Act 1891(Qld)
17.50: Partnership continuation
17.57: Business created with the aim of making profit
17.220: Oblique conditions in a partnership
17.350: Partners relation to third party
Common Law:
M Young Legal Associates Ltd v Zahid (2006) WLR 2562- one can be a partner even if this person does not want profit share from the business.
Construction Engineering (Aust) Pty Ltd v Hexyl Pty Ltd (1985) 155 CLR 541- Partner manages the business and the other partners for the rationale of the partnership business.
APPLICATION
Chapter 17 of the Partnership Act of 1891, elements kept by Fantastic to demonstrate that he should get his balance:
Legality of Christian in the business
Was it worth getting into business deal with Christian.
The basic issue in this case is how: Harry, Allan and Christian are determined to create a business relationship. Considering their type of business, is it partnership kind of business or not? In partnership kind of business, parties involved must run the business together and they must all be enthusiastic to run the business. The partners can make an agreement amongst themselves orally or in writings. Lastly, is it possible for Fantastic to claim the remaining balance of $ 4,000 or not from the business?
Law applicable to matters in the case is the Partnership Act of 1891. Chapter 17 explains partnership as a business between two or more people aiming at making profit. Their aim of the business was profit generation and the kind of agreement is partnership.
Chapter 17.50 of the act states that, for a business to run smoothly and grow the business must have a plan. The partners fulfilled the rule in chapter 17.50 of the act by having a business plan.
When Allan and Harry asked Christian to join them in their business, Christian accepted but on condition that he will not contribute any capital nor share the profits of the business but must be entitled to a yearly retainer. Chapter 17.57 answers this case as it states that, people can be partners in business with or without contributing any capital or claim a share of the profit made. The verdict of M Young Legal Associates Ltd v Zahid (2006) WLR 2562 depict the vital part of the issue. Whether or not Christian contributed capital does not bar him from being a partner.
Chapter 17.220 shows that the duties and privileges of partners. Each member of the partnership business is allowed to conduct major management of the business. Christian had the duty of purchasing for the business and supervising Allan and Harry. Chapter 17.350 of the Act: Construction Engineering (Aust) Pty Ltd v Hexyl Pty Ltd (1985) 155 CLR 541. Support Christian’s act of buying chairs from Fantastic. In order to approve the fact that Christian was part of the business, the letter he faxed to Fantastic had the business’s letter head.
Fantastic can therefore claim his balance from the business because Christian’s act was not against the Partnership Act of 1891.
