1.9 - Liability of Partners - Fiduciary Duties to Each Other

Question 1

What do partners owe each other?

Answer 1

A duty of care in relation to the conduct of partnership affairs - must act honestly and in good faith

Question 2

What is the first duty set out in sections 28 to 30 of the Partnerships Act?

Answer 2

Partners must give true accounts and full information of all things affecting the firm

Question 3

What is the second duty set out in sections 28 to 30 of the Partnerships Act?

Answer 3

Every partner must account to the firm for any benefit he has had without the consent of the other partners from any transaction concerning the partnership (where partner has used partnership property for own benefit/ made personal profit or use connection gained by acting on behalf of business)

Question 4

What case is an example of the second duty set out in sections 28 to 30 of the Partnerships Act?

Answer 4

Bentley v Craven
- Partner bought sugar cheaply and sold it to partnership to make profit - didn’t declare this
- Had to give profit back to firm

Question 5

What is the third duty set out in sections 28 to 30 of the Partnerships Act?

Answer 5

Competing with the firm - if a partner carries on a business which competes with the firm, he must account for and pay over any profits