Relations between partners Flashcards
In the absence of agreement, what implies terms between partners?
Common law
Why do partners owe fiduciary duties to each other?
Because the relationship between partners is one of mutual trust coupled with unlimited liability in respect of partnership liabilities
Duty of good faith
To act honestly and for the benefit of the partners as a whole
Defence to breach of duty of good faith
The other partners knowing about the act
Bristol v Mothew 1998
- Act honestly
- Act in good faith
- No conflict rule
- Take no unauthorised profits
Law v Law 1905
If a partner conceals financial info and expects to benefit from it, the sale is voidable and may be set aside
When can the partners retain the benefits?
When other partners consent to them following full disclosure
John Taylors (a firm) v Masons (a firm) and another 2001
Goodwill and business connections as partnership assets can still exist after dissolution and up to the time the partnership’s assets are realised
If partners contribute capital to the partnership in unequal shares…
An implication arises that the parties intend to own capital in the proportions of their respective contributions
Re Albion Life Assurance 1880
If there is an agreement to share profits unequally and nothing is said about losses, the presumption arises that losses are to be shard in the same proportion as profits
Stewart v Forbes
Agreement to share profits unequally might be deduced from a previous course of dealings between partners and may amount to evidence of an alteration to any prior agreement to share profits equally
Watney v Wells 1861
Interest on capital ceases to be payable on the dissolution unless the partners agree otherwise
Trego v Hunt 1896
A partner cannot use extracts or copies of the partnership books for any purpose detrimental to the interests of the firm, even after he ceases to be a partner
Before a partner is indemnified, he is what?
A creditor
