Lance purchases a new ute from Mighty Motors Pty Ltd for $25,000. He tells Lynton, the car salesperson that he is a partner in a herbal products business. Lynton is aware of the business as he has read an article about it in the local newspaper.
The three partners had agreed that a car would be purchased for the business but Lance was instructed not to spend over $20,000.
Lynton is completely unaware that Lance has a purchasing limit.
Will the partnership be bound by this contract? Can the other partners take action against Lance?
Xiaojing is keen to sell her products. The business produces a lavender and Echinacea moisturiser. The business produces an advertising flyer that states the moisturiser will ‘slow the effects of ageing’. This is false.
The partnership is not happy with the Ute – they think they have bought a ‘lemon’. They decide to sell the car to Saqlaim a refugee from Syria who has little understanding of English. Fast talking and charismatic Lance talks him into purchasing the car. He enters a contract with a finance company to purchase the car.
Will Saqlaim be bound by the contract? Do consumers have a remedy regarding the claims re the moisturiser?
Felix a uni student aged 20 is keen to earn some income during the summer holidays. He is employed as a casual to pick lavender. He will be paid $25 cash per bag.
One Sunday Xiaojing tells him that he is doing such great work she will pay him an extral $100 for work he did yesterday clearing garden beds.
She reneges on her promise and Felix is outraged. He wants to know if he can sue Xiaozing for the $100. Advise Felix.
Lance is a partner in the herbal product partnership business. All the three partners have come to an agreement to purchase a car for the business and Lance was instructed not to spend on the purchase beyond $ 20000. Lance purchases a car from the seller Lynton, who was selling the Ute car for the company Mighty Motors Pty Limited. The car which was bought by Lance amounted to $ 25000 which was beyond the amount as agreed upon by the contract of partnership. Lynton, the car seller was aware about the business but he did not know that Lance had a purchasing limit as per the partnership agreement (Coffee , Sale & Henderson, 2015).
Partnership is bound by the contract. The contract is a legal document where the liability of the person is joint and several. If any person enter a contract then they are liable to the contract jointly. In the form of partnership there is a concept of entity and each and every one who has formed the partnership firm has unlimited liability. Thus the partners are subject to the actions of other partner Lance (Al-Khafaji, Lo & Kelly, 2014).
Under the partnership Act, each and every partner shall be sued if a joint action is bought against them. Any of partners can be sued on an individual basis for the damages which were associated to a wrongful act by the partner Lance. As per the partnership act they provide for indemnification for any deed (O’Connor & Asthana, 2015).
The partners had a contract of partnership and each and every one was severally bound by the contract. The negative thing about the partnership Act is that the partnership is a form of business organization where it imposes liability on all the partners personally and without any limit. The Act provides that all the partners in the partnership firm are severally and jointly liable for all the obligation of the partnership unless otherwise agreed by law (Butcher & Dalton, 2014).
Each of the partners in the Partnership Act owes a fiduciary duty to the partnership and each of the partners act on the good faith which requires a partner to account for any benefit that they receive during the partnership deed. Each of the partners has a duty to be loyal and thus it restricts the partner so that they do not use any personal benefit and restricts in the partnership engaged in usurping the partnership opportunities (Walsh, Hirst & Messina, 2016).
There are many cases when the partners acted beyond the contract, the Court ruled and gave the verdict that all the partners in the agreement shall be liable to the obligation and therefore shall be bound by the agreement. If there are no provision in the partnership deed then Lance who purchased the car would not be attracted to the obligation but there was an agreement between them that the amount spend should not exceed $ 20000 and Lance has acted beyond the contract therefore all the partners can take action against him. The courts in a number of cases has held that the suit is for enforcement of any right arising out of a contract entered into by or on behalf of the registered firm with the partners or with the third parties in the course of the firm's business transactions.
Case Study 2
In this question there are two cases
Xiaojing was running a business which was selling moisturizer to the consumers and they were producing moisturizer made of lavender and Echinacea. She sold her moisturizer giving advertisement which stated that the moisturizer will slow the effect of ageing of the consumers and this was actually false.
The advertisement which was given by Xiaojing was false and did not have any effect to the people who applied it and therefore we can see it was the owner of the moisturizer company who was at fault and therefore they will have to give refund to the consumers who claimed against false marketing (Lacey & Lamont, 2014).
In the above case, the person was selling moisturizer and she was selling false items which actually do not have any effect on the consumers thus the consumers applied to Xiaojing so that they can claim refund from them. (Nayak, 2015).
Thus to conclude we can say that if the business is started and conducted on a note to cheat the consumers then they will have to refund the consumers the cost of purchasing the moisturizer if the products is not good. Thus the remedy to the consumers is to apply to the consumer forum so that they can get a refund for it.
As per the case, the partners were running a business and it was not doing well so they decided to sell the car which Lance had bought previously from the car seller Lynton. The partnership business was not running well so the purchase of the car was considered as lemon and it, thus they decided to sell the car to Saqlaim
In the partnership firm one of the partners were Lance who was fast taking and very charismatic and charming and since they were not happy with the partnership of Ute car they have bought they thought of selling the car to Saqlaim who is the refugee from Syria (Coffee , Sale & Henderson, 2015).
They thought of selling the car to Saqlaim, a refugee from Syria who did not have a understanding in English therefore Lance would be able to easily sell the car using the trick. Thus Lance was able to convince Saqlaim so that he buys the car, thus they enter in a contract by a finance company.
Lance sold the car to Saqlaim which was sold on fraud since he did not have proper understanding in English it was sold to him by Lance using trick and taking advantage of his weakness. Thus Saqlaim will not be bound by the contract since in this case the company did not disclose the facts during selling the car (McKendrick, 2014).
We can conclude that Saqlaim was innocent and was not aware what the consequences of the contract would be, so he entered into a contract with Lance. Thus Saqlaim will not be liable to the contract.
In the case Felix, who is a student of age of 20 is very keen so that he can earn some income during her summer holidays. During the summer she employed in the lavender gardens and used to pick up lavender and thus he was given an amount of $ 25 per bag of lavender. This is a tedious work which he was doing so on seeing this Xiaojing appreciated the work and promised him to pay $ 100 more for clearing the garden beds. Felix became very happy on knowing this. But later on Xiaojing refused to keep her promise to pay extra to Felix and this made Felix become raged and he thought of suing Xiaojing (Cartwright, J2016).
A contract is a document which makes the other person obliges to do or act as per the written document. If the person does not oblige by the contract then the opponent can sue the other person and make them bound by the deeds of the contract, but oral promise is not a contract therefore as per the above case Felix cannot suit a file or sue against Xiaojing for not keeping her promise to pay her extra for the work (Duncan,2014).
As per the above case we can see that in spite of making the promises and encouraging Felix that he has put so much efforts for picking up the lavender from the gardens and putting a lot of effort for doing such great work. Later on when she backed off, this made Felix rage in anger and he thought of filing a suit against her. But Felix cannot file a suit against her since there was no contract which was entered between them and there was no proof whether Xiaojing has promised Felix that she will pay extra $ 100 for his effort (Anderson, 2016).
It was advisable that Felix should make a contract on her extra pay so that he could sue her when she failed to abide by her words.
Al-Khafaji, K., Loy, J., & Kelly, A. M. (2014). Characteristics and outcome of patients brought to an emergency department by police under the provisions (Section 10) of the Mental Health Act in Victoria, Australia. International journal of law and psychiatry, 37(4), 415-419.
Anderson, J. (2016). Uniform evidence law. Leichhardt, NSW: Federation.
Butcher, J., & Dalton, B. (2014). Cross-sector partnership and human services in Australian states and territories: Reflections on a mutable relationship. Policy and Society, 33(2), 141-153.
Cartwright, J. (2016). Contract law: An introduction to the English law of contract for the civil lawyer. Bloomsbury Publishing.
Coffee Jr, J. C., Sale, H., & Henderson, M. T. (2015). Securities regulation: Cases and materials.
Coffee Jr, J. C., Sale, H., & Henderson, M. T. (2015). Securities regulation: Cases and materials.
Duncan, W. D. (2014). Is there such a thing as an “irrevocable authority”?. Australian Property Law Bulletin, 29(8), 147-149.
Lacey, J., & Lamont, J. (2014). Using social contract to inform social licence to operate: an application in the Australian coal seam gas industry. Journal of Cleaner Production, 84, 831-839.
McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press (UK).
Nayak, R. K. (2015). Consumer protection law in India: an eco-legal treatise on consumer justice. Indian Law Institute, New Delhi.
O’Connor, M., & Asthana, M. S. (2015). Refusal to Comply With Dowry Demands Contributes to Family Violence and Death in Victoria.
Walsh, N., Hirst, M., & Messina, A. (2016). News from the Australian seedbank partnership. Australasian Plant Conservation: Journal of the Australian Network for Plant Conservation, 25(2), 20.
To export a reference to this article please select a referencing stye below:
My Assignment Help. (2021). Legal Cases: Partnership Agreement And Consumer Protection Essay.. Retrieved from https://myassignmenthelp.com/free-samples/law6000-business-and-corporate-law/mighty-motors-company.html.
"Legal Cases: Partnership Agreement And Consumer Protection Essay.." My Assignment Help, 2021, https://myassignmenthelp.com/free-samples/law6000-business-and-corporate-law/mighty-motors-company.html.
My Assignment Help (2021) Legal Cases: Partnership Agreement And Consumer Protection Essay. [Online]. Available from: https://myassignmenthelp.com/free-samples/law6000-business-and-corporate-law/mighty-motors-company.html
[Accessed 01 March 2024].
My Assignment Help. 'Legal Cases: Partnership Agreement And Consumer Protection Essay.' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/law6000-business-and-corporate-law/mighty-motors-company.html> accessed 01 March 2024.
My Assignment Help. Legal Cases: Partnership Agreement And Consumer Protection Essay. [Internet]. My Assignment Help. 2021 [cited 01 March 2024]. Available from: https://myassignmenthelp.com/free-samples/law6000-business-and-corporate-law/mighty-motors-company.html.