BUSINESS LAW

Business Law



Business Law

Introduction

Breach of partnership contract is one of the prevailing phenomena of today's business world, which incurred several tangible and intangible losses to a business. There are several laws in place to protect the breach or infringement of contract and held partner or partners liable before the court if the breach is proved. The purpose of this paper is to study and analysis a partnership case of George and Anita and to assess whether George can take action against Anita for breach of the partnership contract. The later section of this paper shed light on provisions of the competition and consumer act 2010 affects law relating to restraint of trade at common law.

Discussion

Q1# George and Anita Case

Facts

George and Anita had decided to commence a business of fast food restaurant in partnership. Before commencing a business, they had asked a solicitor to prepare a partnership deed, which include rights and obligations of each partner. The partnership deed has the power of law and is intended to offer guidance both partners in the business conduct. This might help partners in preventing disagreements and conflicts regarding each partner's role in running the fast food restaurant. In case of George and Anita, the business was doing well initially. Later on, the dispute had arisen between Anita and George on who should run the fast food restaurant.

Anita and George did business to about a year, but eventually end up with a violent argument between them; as a result, Anita left the business. Later on, she started a new business in competition with the prior fast food restaurant. This initiative of Anita brought significant losses to the fast food restaurant, which she started in partnership with George. However, new restaurant did well and turned out to be successful in the short span of time.

Issue

This situation arise a question that whether George can held Anita liable or whether Anita has any liability of contract breach?



Law

Under the Australian Partnership Act 1895, Section 41, a partner cannot commence a business of same or competing nature. If she does so, the partner must pay all profits made by her in that business (Latimer, 2012, pp.978-998). Under this Act, a partner held a fiduciary duty that obliges him to act in the best interest of another partner. In partnership context, the fiduciary duties include two clauses. One is of the duty of care, and second is of the duty of loyalty. The loyalty duty is confined to issues like holding as partnership property of the trustee and is inappropriate to opportunity of partnership, which refers to act in place of the other partner of similar interest unfavourable to the partnership, as well as oblige not put competition against the partnership business. Generally, fiduciary duties to the partnership are not owed by limited partners or other partners (Fletcher, 2007, pp.25-140). Nonetheless, it is argued that when a partner (limited) operates in a legal manner and as per partnership direction, the partner can be considered a ...