Case Study of Partnership Act 1891 Queensland

Case Study of Partnership Act 1891 Queensland

Introduction

This paper examine the case to assess the clauses and existence of partnership under the Partnership Act 1891 Queensland, in order to provide advice to Jane, whether there is a partnership between Tom and Mary, and why Jane want to prove the partnership. This essay include section 5, 6 and 8 of Partnership Act 1891 Queensland as it offers significant insight on partnership.

Discussion

Facts

Tom and Mary both were very excited to start a new business of flower shop. They mutual decided that Mary will be responsible for leasing premises, while Tom will purchase equipments for the shop. Thus, Tom has ordered one hundred pots from Jane. Later on, the idea of partnership has been dropped while Mary has received the delivery of pots but did not make payment to Jane.

Procedural History

US High Court in case of Polkinghorne v Holland (1934) 51 CLR 143 ruled the case of a partnership. Mrs. Polkinghorne was a solicitors firm's client that has three partners. One of the partner named Harold Holland had advice Mrs. Polkinghorne regarding investment where Holland was interested financially. The investment advice failed, and the client incurred a huge loss; thus, she accused the firm and claim damages. In this case, the main issue is whether innocent partners were legally responsible for the client loss. The verdict of High Court made all partners liable for the act. Similar case is with Lloyd v Grace Smith & Co [1912] AC 716, the court held all partners equally liable for the transaction or dealing with an outside partner or third party (Christensen & Duncan, 2009).



Issue

Before offering advice to Jane, it is essential to look at the provisions and sections of Partnership Act 1891 Queensland to examine whether there is any partnership exists between Tom and Mary, and assesses how the act offer protection to Jane and facilitates in receiving partnership.

Rule(s)

According to Partnership Act 1891 Queensland, partnership is relatively inexpensive, informal, simple and common way to structure or set up a business. It engages two or more partners that incorporate a new business together, such as Tom and Mary did. Additionally, it also requires intent to share and make a profit and an understanding that both partner act on behalf of one another in business. This act sets out a range of rules for partnership; whereas, a formal Partnership Agreement can vary most of these rules. In order to make sure that both partners have a clear understanding of their obligations, responsibilities and rights, along with a written contract of partnership are essential (Burnett & Bath, 2009).

Section 5 of Partnership Act 1891 Queensland asserts that each partner is the agent of the company, and other partners for the business purposes can act on behalf of other. This section made it apparent that partners have the right to make a purchase or make business deals on the name of the business. However, this section necessitates the written agreement ...