5 Case Studies
(Related to Partnership)
Subject: Business Law
CASE 1
A
and B carry on business in partnership as piece goods merchants. A finances the
business and is a sleeping partner. B receives certain piece goods belonging to
C in ordinary course of business. B knows that the goods are a stolen property.
Of the goods so purchased and sold by B, the proceeds of a part of the goods
are entered in the books of the firm. A wants to avoid the liability towards C
on the ground of misconduct by B. Discuss the liability of A,B and C.
Hint: both A and B are
liable in damages for the value of all the goods of C.
Case1 Summary:
In
this case if one person among the partners using the resource of the third
person(not include in partnership) and none of the partner resist the due share
in profit will be responsible of the loss given by the any of the partner
related to business transaction to that particular third person. If A and B are
in partnership and A is sleeping partner, will be responsible of the lose occur
due to the decision making of the partner B. If the person C will come to ask
for the profit sharing in A and B partner will not allow in sharing the profit.
Case1 Reverse:
A
and B carry on business in partnership as Fruit merchants. A finances the
business and is a sleeping partner. B receives certain piece goods belonging to
C in ordinary course of business. B knows that the goods are a stolen property.
Of the goods so purchased and sold by B, the proceeds of a part of the goods
are entered in the books of the firm. A wants to avoid the liability towards C
on the ground of misconduct by B. Discuss the liability of A,B and C.
Case
2
A
and B are partner in a stationary business. A orders in a firms name and on the
firm letter head to be supplied with two bags of wheat at his residence. Is the
firm liable to pay the debt?
Hint:
No
Case2 Summary:
They
both are in the partnership of stationary business not in the partnership of
wheat traders. So B is not liable for any such claim which is done by A because
their business is not related to wheat, and the business is related to
stationary business.
Case2 Reverse:
A
and B are partner in a Dairy business. A orders in a firms name and on the firm
letter head to be supplied with two bags of powder milk at the firm premises.
Is the firm liable to pay the debt?
Hint: Yes
Because
the firm core business is related to dairy product and A order the dairy
product item. Order item is delivering at the firm premises. So the firm is
liable to pay.
Case
3
Four
partners established a partnership for refining sugar. One of them is a whole
sale grocer and had great skill in buying sugar at a right and proper time for
the business. Accordingly the business of selecting and purchasing sugar was
entrusted to him. Accordingly to his skill and knowledge , he bought sugar for himself
at a time when he thought it likely to rise. The sugar rose in value and the
firm was in want to same. He sold his own sugar to the firm, without letting
the partners know that it was his sugar that was sold. Is he accountable to the
firm for profit he makes?
Hint: yes
Case3 Summary:
If
the partner is purchasing from his own business and making profit from the task
which is handed over to him will be response to share the profit among the
partner because that profit is taken by the partner by miscommunication to
other partner.
Case3 Reverse:
Four
partners established a partnership for refining sugar. One of them is a whole
sale grocer and had great skill in buying sugar at a right and proper time for
the business. Accordingly the business of selecting and purchasing sugar was
entrusted to him. Accordingly to his skill and knowledge, he bought sugar for
himself at a time when he thought it likely to rise. The sugar rose in value
and the firm was in want to same. If he purchase sugar on loss, without letting
the partners know that it was sugar that was purchase on loss. Is he only
accountable to the firm for loss?
Hint: No
Case3
Reverse Summary:
The
entire partner is responsible to share the loss because if the partners are
making profit by the decision of the partner then if some time loss occur then
they are also responsible to share the loss.
Case
4
A, B
and C enter into a partnership agreement under which C is not liable for the
losses. D filed a suit against A, B and C. Examine the position of C.
Hint: C is liable to D,
jointly with A and B and also severally for all acts of the firm done while he
is partner.
Case4 Summary:
In
this case we learn that if one is partner then he is liable for all kind of
losses occur during its partnership.
Case4 Reverse:
A, B
and C enter into a partnership agreement under which C is sleeping partner. D
filed a suit against A, B and C. Examine the position of C.
Hint: C is liable to D,
jointly with A and B and also severally for all acts of the firm done while he
is partner.
Case
5
X, Y
and Z are partners in a firm. X dies and Y and Z continue the business in the firm’s
name. Afterwards the firm becomes insolvent. Discuss the liability of X’s estate
to the creditor of the firm. Will it make any difference if a person lends
money to the firm believing that all the three partners are alive?
Hint: the estate of X is
not liable in both the case
Case5 Summary:
In
case of the partners death situation if any loss occur then the person who is
death will not responsible for loss occur after his death.
Case5 Reverse:
X, Y
and Z are partners in a firm. X lives and Y and Z continue the business in the
firm’s name. Afterwards the firm becomes insolvent. Discuss the liability of
X’s estate to the creditor of the firm. Will it make any difference if a person
lends money to the firm believing that all the three partners are alive?
Hint: the estate of X is
not liable in both the case
Case Studies, Business Law, Partnership related cases, Law Cases.
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