LAW

Agency & Partnership



Agency and Partnership

Part 1

Question 7

Yes, a partner is an agent of partnership according to the SEC. 79-12-17. The reason is that he is representing the whole entity. Sometime, he acts and decides on behalf of other people in the partnership. However, this authority is one the discretion and with mutual agreement of all the members. The partner acting as an agent is supposed to act in interest of the business.

Question 8

Part 2 of the law of associations discusses the impact of the Associations Incorporation Act 1984. It states that except where otherwise agreed, there will be no legal relationship between the members inter se or between members and the committee of an unincorporated association. Moreover, the members are not personally liable beyond their membership fees which are due in contract.

Question 12

The wife is legally bound to the husband in the laws of matrimony, and as such, any legally binding agreement that she enters in will also bind her husband. Since both are life-partners and share the contract of matrimony, therefore, both share the same liabilities. According to the section 17 of the American commercial law, a husband is responsible for providing basic necessities to his wife. This authority has been conferred by law to a man's wife. However, it is only limited to a certain extent. This can be revoked in special circumstances including trade related liabilities (CanLII, 2000).

Question 16

Yes, P is liable because he knew the facts of the sale and still went ahead to accept them because they were of benefit to him. He is equally involved in the act of fraud and deceit. In case 'P' was unaware of the fraudulent activities undertook by 'A', he was innocent. However, since he has knowledge of the unlawful and immoral acts, and still proceeded and accepted the revenues; therefore, he is liable for fraud and deceit under the eyes of the law.

Question 17

Yes, it ratifies the fraud because of the fact that they refused to return the money even after they knew how it had been obtained. The corporation was not liable or guilty until the time it was unaware of the fraud. However, after knowing the fact that the agent spread wrong and fraudulent statements about the company, in order to sell the shares, the company becomes liable to return the money, as the shareholders were under a false impression about the company. Since the main objective of any organization is to maximize the shareholder's wealth, it should clarify the statements made by the decision. Then shareholders should be the one to decide whether to take back their money (NHBA Ethics Committee, 1992).

Question 20

A has not earned any commission because a sale has not been made. According to the realization principle of generally accepted accounting principles, one should report the revenue or loss only after the realization of the transaction. In this case, 'P' is liable to the agent after the completion of the sale. However, since no sale occurred, no revenues were generated; therefore, ...