partnership

Question 1

Partnership By Estoppel

Answer 1

1. A representation that person is the partner of another
2. Made by the person sought to be charged as a partner or with consent
3. A reasonable reliance by the third party upon the representation
4. A change of position, with consequent injury, by the third person.

Question 2

Events that can cause Dissociation of Partnership (Giles)

Answer 2

{i} The partner engaged in wrongful conduct that adversely and materially affected the partnership business

{ii} The partner willfully or persistently committed a material breach of the partnership agreement or of a duty owed to the partnership or the other partners under section 404

{iii} the partner engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with the partner.

Question 3

if only contribution is that of skill and labor?

Answer 3

Can not hold that person liable (Reed - remodeling business)

Question 4

Amount of Partners need to bound the partnership?

Answer 4

Ordinary = majority of partners (one for two partner partnership)

Extraordinary = Unanimous consent

Question 5

what transferee gets from transferred partners interest?

Answer 5

[1] distributions to which the transferor would otherwise be entitled (basically, they get the check).

[2] net amount otherwise distributable (upon winding up and dissolution)

Question 6

when is property presumed to be partnership property? when is it not?

Answer 6

{1} Presumed if purchased with partnership assets

{2} Not presumed if Property acquired in the name of one or more of the partners, without an indication in the instrument transferring title to the property of the person’s capacity as a partner or of the existence of a partnership and without use of partnership assets

Question 7

Duty of Care for a partner

Answer 7

to refrain from engaging in grossly negligent or reckless conduct, willful or intentional misconduct, or a knowing violation of law.

Question 8

Duty of Loyalty for a partner

Answer 8

Duty to refrain from dealing with the partnership and refrain from competing against the partnership.

Question 9

Factors for a partnership (Fenwick beauty salon)

Answer 9

The first factor is the intention of the parties and language of the agreement.

Another factor is the right to share in the profits and losses of an enterprise

A further factor is ownership, management, and control of the partnership property and business.

Another factor is the conduct of the parties toward third persons.

The final factor concerns rights upon termination of the partnership – need a “winding up,” or an indication that the partnership dissolves when one leaves.

Question 10

Elements of a partnership

Answer 10

[1] two or more people
[2] for profit entity
[3] co-ownership of property by partners (do not have to be equally owned).

Question 11

Estoppel

Answer 11

[1] third party justifiably is induced
[2] to make a detrimental change in position
[3] the person intentionally or carelessly caused such belief

or

[4] having notice of such belief and that it might induce others to change their positions, the person did not take reasonable steps to notify them of the facts