ICAS TC Business Law Module 7

Question 1

Stewart v Buchanan 1903

Answer 1

Facts: Buchanan had provided capital to Saunders to set up in business. Buchanan
leased premises to Saunders and also provided fittings. Stewart, who supplied goods
to the business, alleged that Buchanan and Saunders were carrying on business in
partnership. Stewart was seeking payment of an unpaid bill and if he could establish
there was a partnership, he could then sue Buchanan. An agreement between
Buchanan and Saunders expressly stated that Buchanan was not to ‘be held to be a
partner in the said business or liable for its debts and obligations’.

Held: That there was a partnership and that the statement in the agreement was an
attempt by Buchanan to carry on business without the risk of liability.